The development of education and science is an essential prerequisite for the successful recovery of Ukraine, its accelerated socio-economic development, and its emergence as a successful European state. This development, in turn, depends on the positive changes in other areas, including the economy, law, healthcare, etc.  

It is necessary to establish effective mechanisms for society and the labor market to influence educational content and learning outcomes. Vocational education at all levels should focus on the acquisition of highly sought-after professional qualifications.

The coronavirus pandemic and Russia's military aggression against Ukraine have become a huge challenge for the education and science system, just as they have challenged Ukraine as a whole. Month-long quarantines, a large number of refugees and internally displaced persons among students, teachers, and researchers, the impact of shelling, and prolonged air raids on the educational process have led to significant educational losses and gaps, the extent of which can only be determined over time. The establishment of remote learning and the creation of national and local digital resources have only partially alleviated the problems. As of April 2023, about 3,200 educational institutions have been damaged and nearly 300 completely destroyed. These figures are increasing every week. More than 900 institutions are located on the occupied territory.  

An important prerequisite for the recovery of education and science is to revise the legal status of educational and research institutions, which should be granted greater academic, financial, organizational, and employment autonomy, enabling them to be less dependent on budget funding and respond to new challenges more quickly and effectively. One of the ways to solve this problem is to transform most state and municipal higher education and research institutions into public institutions that have the right not only to use or dispose of state and municipal property but also to own, use and dispose of their own property obtained from their own proceeds. There should exist an effective guarantee of equality in the rights of public and private educational and research institutions to conduct educational and research work.

The advancement of education, science, and innovation depends to a large extent on related public life domains, socio-economic development, and the legal framework. At the same time, the latter aspects are also significantly dependent on education, science, and innovation. In particular, there are urgent issues of improving civil, budgetary, and tax legislation, ensuring the rule of law, protecting investments and intellectual property, and academic and professional integrity. Systematic updating of legislation based on research and knowledge, and evidence-based key political and economic decision-making should contribute to this.

Education at all levels and science should have adequate financial and logistical support, sufficient to ensure their quality, competitiveness, and usefulness for the socio-economic development of Ukraine.

1. POLICY IN THE FIELD OF SECONDARY EDUCATION

Russia's full-scale aggression against Ukraine has significantly affected the state of the general secondary education system. The buildings and material and technical base of general secondary education institutions have been significantly damaged, and in some cases completely destroyed. 

Many students and teachers have become refugees or internally displaced persons. According to the Ministry of Education and Science of Ukraine, as of January 2023, more than 510,000 students and almost 12,500 teachers of general secondary education institutions were abroad. At the same time, other countries report significantly higher numbers. According to the Education Ombudsman S. Gorbachev, in April 2023, 775,452 Ukrainian refugee students were integrated into local schools in the EU alone. A significant number of them do not attend secondary education institutions in their host countries, and many do not study anywhere at all, even remotely in Ukrainian general secondary education institutions. According to the World Bank's Education Sector, the educational losses in Ukraine due to the war and pandemic may exceed one year.

Rebuilding educational institutions, restoring their material and technical base, and eliminating educational losses and gaps caused by the war and the coronavirus pandemic will be important tasks for Ukraine's recovery in the period up to 2030.    The restoration of the full general secondary education system should take into account changes in the demographic situation, forecasts of social and economic development, and the use of new, in particular digital, technologies.

The new Law of Ukraine On Education adopted by the Verkhovna Rada of Ukraine in 2017 launched a comprehensive reform of general secondary education aimed at ensuring innovative, socio-economic, and cultural development of society through the formation of the necessary human capital. At the legislative level, this path was pursued with the adoption of the new Law of Ukraine On Complete General Secondary Education in 2020. 

Important aspects of the reform (development of the New Ukrainian School) were

• Ensuring the quality of general secondary education, ensuring the successful performance of graduates of general secondary education institutions and the formation of key competencies for lifelong learning, expanding the practice of using external independent testing of learning outcomes

• Ensuring equal access of children to quality secondary education;

• Creating an educational environment favorable for the development of children;

• Changing the management system of general secondary education, increasing the level of autonomy and responsibility of general secondary education institutions, and ensuring conditions for the development of an effective network of educational institutions;

• Improvement of the management system in educational institutions, diversification of organizational and legal forms of educational institutions;

• Ensuring the right of students to individual educational trajectories and individual curricula, and the recognition of the results of non-formal and informal education;

• Changing the system of professional development of educators, providing them with considerable freedom in choosing institutions that provide professional development, their educational programs, etc.;

• Bringing the structure of general secondary education in line with its structure in European countries;

• Improving funding and logistics of educational institutions;

• Ensuring equal rights of municipal, state, and private institutions in conducting educational activities.

To implement the reform, a number of regulations have been developed, including new standards for primary and basic general secondary education founded on substantially different principles and focusing not on specific knowledge but on competencies and learning outcomes that include not only knowledge and skills but also the ability to use them effectively to solve typical problems. 

According to the State Statistics Service of Ukraine, at the beginning of the 2021-2022 school year, there were 13991 general secondary education institutions in Ukraine, with 4.23 million students and 435 thousand teachers. Thus, in the sphere of general secondary education, the total number of students and teachers exceeded 10% of the total population of Ukraine. Compared to the 2011-2012 school year, the number of institutions decreased by 27%, the total number of students increased by 3.8%, and the number of teachers decreased by almost 11%. At the same time, the ratio of students to teachers is 9.7, and the average number of students per institution is 302. This is 16 and 42 percent higher than in the 2011-2012 school year, respectively. These indicators vary widely across institutions, regions, and areas. For example, the number of students per teacher at the beginning of the 2021-2022 school year ranged from 7 in the Ternopil region to 12 in the Dnipropetrovsk, Donetsk, and Odesa regions and the city of Kyiv, and from 5-9 in rural areas to 10-13 in urban areas. For comparison, in OECD countries, this figure ranges from 8.5 to 26.9 (in most countries, it falls between 10 and 15).

It should be noted that specialized secondary education is obtained not only in general secondary education institutions but also in vocational and professional higher education institutions. The total share of 9th-grade graduates who choose these paths is about 40%.

Based on these data, it can be assumed that the possibilities of increasing the efficiency of using general secondary education resources by consolidating institutions have been largely exhausted. At the same time, the optimization of the network is relevant, provided that the optimization is understood as achieving a maximum educational performance of the network of general secondary education institutions under the existing limits on the possible scope of funding.

The vast majority of institutions are communal. The number of private institutions has increased from 189 to 406 since the 2011-2012 school year, although their share remains very small (2.9%). The shares of students and teachers studying or working in such institutions are even smaller, at 1.6% and 1.9%, respectively. This suggests that one way to improve the network is to encourage the creation and development of private and cooperative general secondary education institutions.

Only 6.5% of the total number of general secondary education institutions are autonomous primary schools and primary schools with preschool departments, and the share of autonomous lyceums is 3.9%. Instead, the largest share (58.9%) is that of lyceums that also include a primary school and a gymnasium, and sometimes a preschool department.) This contradicts the concept of the New Ukrainian School, which stipulates that institutions of different levels of general secondary education should be separate.

The reform of general secondary education faces many problems - conceptual, legislative, professional, financial, logistical, etc.

At the conceptual level, there are discussions about what should be the goal of general secondary education and its main outcomes. The concept of the new Ukrainian school envisages a competency-based approach to the formation of relevant requirements, but their elaboration should be specified in bylaws that should be coordinated with relevant international and European documents. Primarily, the International Standard Classification of Education, the EU Council's recommendations on key competencies for lifelong learning, and the European Qualifications Framework for Lifelong Learning. But today, there is no consistent implementation of these requirements in Ukrainian legislation, which gives rise to uncertainty and often a significant underestimation of requirements when designing standard educational programs, model curricula, and assessing learning outcomes. In addition, the educational process in schools is dominated by an emphasis on the memorization of certain material rather than the development of the ability to apply knowledge and skills to solve typical applied problems that students and graduates face or are expected to face in their lives and professional activities.

At the legislative level, it is important to eliminate internal contradictions in educational legislation and its conflicts with other legislation. In particular, this applies to the autonomy of general secondary education institutions, which today is limited not so much by educational legislation as by other legislation, including the Civil and Budget Codes, the Laws of Ukraine On Local Self-Government and On Local State Administrations, etc. Because of this, there are many examples of unjustified interference by local authorities in the operations of general secondary education institutions and the shifting of their responsibilities as founders of these institutions to educational institutions and their managers. The current legislation does not consistently implement the concepts of academic freedom of teachers and the provision of opportunities for students to create individual educational trajectories.

For a long time, the issue of securing a decent social status for teachers has not been resolved. The average salary in the education sector is about 80% of the average salary across the economy, which is significantly lower than in most other European countries. The mechanism of salary formation does not encourage teachers to improve their teaching and professional development. These problems result in a significant decrease in the number of graduates of general secondary education institutions wishing to pursue higher education in pedagogical professions, as well as a decrease in the test scores of those who enroll in pedagogical programs, including those funded by the state. For some specialized disciplines, in particular natural science, the number of enrolled applicants is lower than the number of state-funded positions. A significant number of graduates in these programs do not work in schools after graduation, or move on to other careers after a short time working in schools.

espite the fact that the amount of funding for general secondary education as a percentage of GDP or budget expenditures in Ukraine is one of the highest in Europe, it is, by contrast, one of the lowest per student. This is a significant factor affecting the quality of education, and thus Ukraine's ability to develop and apply modern high-value-added technologies that provide a significant share of budget revenues in EU countries. Given the very limited possibilities of rapidly increasing budget revenues in the coming years, the urgent challenges are to enhance the efficiency of using available funds and to ensure the flow of extra-budgetary resources to the general secondary education system. However, the inflow of such resources should not result in extortion from students' parents, as is often the case today.

One of the consequences of the many years of underfunding of general secondary education is the lack of adequate material resources in many institutions, including laboratories, specialized classrooms, etc. for studying natural, technological, and artistic subjects and physical education. A significant number of institutions do not meet the requirements for workplace safety, fire and sanitary safety, or accessibility for persons (both students and teachers) with disabilities. The urgency of these issues has been significantly heightened by the destruction or damage to buildings and the material and technical base of many general secondary education institutions during Russia's full-scale invasion of Ukraine, and the need to create (restore) shelters in educational institutions. 

It remains important to eliminate the difference in access to quality secondary education for students, including primary and basic secondary education, as evidenced by the results of the national external monitoring of the quality of primary education “The state of formation of reading and mathematical competencies of primary school graduates” and the international PISA-2018 study conducted in 2018, as well as by the annual data of the results of the External Independent Testing. Foremost, this concerns the differences in the quality of education between rural and urban schools, regions, territorial communities, educational institutions of different types, etc. In particular, according to the Ukrainian Center for Educational Quality Assurance, in 2021, 7.12% of secondary school graduates, 1.65% of gymnasium graduates, and 31.57% of vocational school graduates did not pass the threshold for the mandatory Ukrainian language and literature test.

For many years, the issue of providing students with quality textbooks has been discussed in society. Existing textbooks sometimes contain gross content errors, are often imperfect in terms of content and methodology, and are uninteresting to students. The methodology for developing textbooks, their competitive selection, and the granting of stamps by the Ministry of Education and Science need to be improved, including through better expertise and the elimination of corruption risks. Choosing textbooks should be a subject of teacher and student or parental choice (depending on age), not a responsibility of state institutions. Recently, digital learning tools have been rapidly advancing, including both electronic versions of conventional textbooks and fundamentally different e-textbooks, virtual laboratories, search and information processing tools, modeling, etc. It can be predicted that their number and variety, as well as the scope of application, will expand significantly by 2032.

Improving educational statistics, which is the basis for evidence-based decision-making at all levels of general secondary education management, is also important. To date, the reform of this sector has commenced. Statistics are becoming more reliable due to the introduction of electronic systems that collect and process primary data from educational institutions. At the same time, the methodology for verifying this data needs to be improved. It is also necessary to bring the structure of the data and calculation methods closer to those used by international statistical databases, primarily Eurostat. This, however, will require a significant addition to the labor costs incurred in collecting and processing statistical data.

1.2. VISION OF THE SECONDARY EDUCATION IN THE PERSPECTIVE OF 2030, INCLUDING MEASUREMENT INDICATORS

Ukrainian society considers high-quality education to be one of the key elements of the successful development of society as a whole and of each of its individual members. The system of general secondary education systematically implements the principles and policies of the New Ukrainian School (NUS), which are periodically adjusted based on the analysis of the results of their implementation, as well as the changes occurring in society and in the world. Effective scientific and methodological support of the general secondary education reform is provided.

The outcomes of complete general secondary education provide a solid foundation of values that enables secondary school graduates to be responsible citizens and members of society, to preserve and develop Ukrainian statehood. Ukrainian schoolchildren have up-to-date competencies and learning outcomes that keep pace with the current needs and are creative individuals capable of thinking and acting innovatively, being open to the world and competitive in the global dimension.  

All children have access to high-quality general secondary education, thanks to the functioning of an effective network of educational institutions, adequate staffing and material and technical support of the educational process, access to quality educational resources, publication of high-quality educational, popular science and methodological literature for students and teachers, and consideration of their particular educational needs.

The educational environment and the educational process at school are modern, safe, friendly, and inclusive, as well as allow students with different educational needs to learn and develop successfully.

The educational landscape of the country and the institutions of general secondary education have been digitized, electronic document management has been ensured, and the National Educational Platform for student learning and professional training of teaching staff has been created and is being further enhanced. Reliable data protection and protection against external interference in information systems are ensured. 

The content of general secondary education meets the needs of children and promotes their personal and professional self-realization. State education standards are developed for all levels of general secondary education, are in line with similar documents in European countries, and are constantly updated and harmonized between levels of general secondary education, and for specialized education, with the standards of higher education. The content of education and expected learning outcomes are systematically reviewed to meet the current requirements and provide for the attainment of key competencies for lifelong learning recommended by the EU Council.

All graduates of basic and specialized secondary education undergo state final certification in the form of External Independent Testing, which provides a comprehensive assessment of learning outcomes using standardized tests in Ukrainian language, mathematics, history of Ukraine, and English, as well as tests in additional subjects, integrated tests and/or tests of general academic competence at the graduate's choice.  

Complete general secondary education helps students to make an informed choice about further education and career, to fulfill their aspirations through further education in vocational, professional higher education, and higher education programs, in non-formal education or through informal learning, as well as through employment and social activities.

Students are subjects of the educational process. Relationships of trust and partnership exist between all participants in the educational process.

Changes in the sector are systematic, consistent, and structured. The continuity of reforms is assured, despite the inertia of the education sector.

Education expenditures from all sources of funding amount to at least 7% of GDP, which is in line with UNESCO's 2030 goals for middle-income countries.

Ukraine participates in all key international comparative studies of the quality of various elements of school education (PISA, TIMSS, PIRLS, etc.). More than 80% of students at the age of 15 reach the basic level of reading, mathematics, and science competence, as evidenced by the results of the international comparative study PISA. 

Teachers and the teaching profession are respected in society. School leaders and teachers are competent professionals who systematically improve their skills and acquire new knowledge. They are able to think critically and foster critical thinking in students. The state stimulates and finances the continuous professional development of teachers. Ukraine has completed the reform of the system of training and professional development of teachers. The competence of school leaders and teachers is determined by their certification based on professional standards that meet the best European practices. The average salary of teachers is higher than the average salary in Ukraine. 

Decentralization of management in the field of general secondary education continues. More management powers are given to communities, as they become more empowered. The government approves standards for all levels of general secondary education; at the same time, the academic, financial, professional, and organizational autonomy of general secondary education institutions is expanding, reflecting the institutions' capacity and responsibility for their performance. The level of funding for education (through national and local budgets as well as other sources) is sufficient to meet the requirements of these standards and the licensing requirements for educational operations. A modern network of hub schools has been created and provided with modern educational equipment.  General secondary education institutions at all levels have established effective internal quality control systems that enable them to make effective managerial decisions.

Funding and material resources are provided for the gradual transformation of the infrastructure of general secondary education institutions across the country, including the physical separation of basic and specialized secondary education institutions from primary schools. Basic and specialized secondary education is provided with separate school premises, which can accommodate a sufficient number of students for the creation of individual educational trajectories, providing the necessary infrastructure for STEM education, arts and sports, civic education, other educational and extracurricular activities, and student self-government. Students are offered a range of academic disciplines (subjects, other educational components) of different fields and levels of complexity to choose from, allowing them to determine their own profile of self-fulfillment and further education.

Specialized general secondary education can be obtained both in lyceums and in vocational and professional pre-university education institutions. Higher education institutions may create/establish specialized secondary education institutions, including scientific, artistic, military, and sports lyceums, as (separate) structural units or independent institutions. 

The educational process is completely free from:

• All forms of misconduct;

• Bullying, discrimination, gender inequality;

• Use of Russian as a language of education and communication;

• Any form of disrespect for the Ukrainian state, its culture, national and historical memory;

• Violation of children's rights.

The effective operation and periodic audit of the institutions established to implement, support and provide methodological support to the state policy in the field of education is ensured.

Some additional indicators that are preferably achieved by 2030:

• Total average expenditures per student of a general secondary education institution are no less than EUR 3,500 per year;

• The average share of separate primary secondary education institutions and primary education institutions with preschool departments (including separate structural subdivisions of hub schools) is at least 25% of the total number of general secondary education institutions;

• The average share of autonomous lyceums is at least 10% of the total number of general secondary education institutions;

• The share of private and corporate general secondary education institutions comprises at least 10% of the total number of institutions;

• The average share of graduates of basic secondary education who continue to receive specialized secondary education in vocational (vocational and technical) education and professional higher education institutions lies within 45-55% of the total number of applicants;

• STEM education constitutes at least 40% of the total study time of lyceum students;

• The percentage of children of the appropriate age who receive full general secondary education in any form of education in each region of Ukraine is at least 98%;

• According to surveys of teachers, students, and parents, at least 70% rate the quality of textbooks and other educational resources for general secondary education as high or very high.

3. 1.3. KEY ISSUES TO BE SOLVED TO ACHIEVE THE DESIRED OUTCOMES IN THE FIELD OF SECONDARY EDUCATION

i. Post-war reconstruction of the network of general secondary education institutions based on perspective maps for each region, taking into account the demographic situation and the application of the principle of “build back better”.

ii. Systematic implementation and, with additional funding, acceleration of the New Ukrainian School reform. Creating a network of multidisciplinary academic and vocational lyceums where students have the opportunity to form an individual educational trajectory and choose study majors.

iii. Developing a procedure for teacher certification according to the professional teacher standard for all levels of the general secondary education system, replacing teacher attestation with certification.

iv. Reforming the system of remuneration of teachers, which should include consideration of their qualifications and all types of teaching, methodological and organizational work.

v. Creating high-quality higher education standards for teacher training based on high-quality professional standards. Teacher training involves a significant amount of practice and/or on-the-job training (in the dual form of education), totaling at least 90 ECTS credits at all levels of higher education. Further demonopolizing of the system of postgraduate education and professional training of teachers.

vi. Professional communities participate in the development of education standards, educational and training programs, and professional standards; provide assistance to teachers in their professional development.

vii. Moving away from a medical understanding of inclusive education. Increase funding for education and assistance in general education schools for children with special educational needs; quality training of teachers and teaching assistants.

viii. Developing a system of educational measurement and standardized external independent testing. Investing in the modernization of the EIT and extending the EIT to basic schools. Developing tools for monitoring the quality of primary, basic, and specialized secondary education. 

ix. Decentralization and demonopolizing of the procedures for procuring, reviewing, and printing textbooks, elimination of corruption risks at the legislative level, and development of accessible digital learning resources. At the same time, setting strict requirements for the quality of textbooks, including scientific and anti-discrimination expertise.

x. Creating comprehensive systems for collecting and analyzing relevant and reliable data on the general secondary education system, which is necessary for making informed and effective decisions. 

xi. Developing effective state institutions and promoting the development of public institutions necessary to ensure the formation and implementation of state policy in the field of education, in particular in terms of the development of the general secondary education system, external independent evaluation of the quality of general secondary education, collection, and analysis of educational statistics, etc.

xii. Establish an independent Educational Fund of Ukraine to support innovations in education through transparent mechanisms for funding relevant initiatives.

4. 1.4. POLICY FOR SOLVING ISSUES IN SECONDARY EDUCATION IN THE PERSPECTIVE OF 2030

Identification of problems/problem groups

1. Inefficient and partially damaged network of general secondary education institutions;

2. Deepening of educational losses and educational gaps;

3. Poor implementation of the New Ukrainian School reform at the level of basic secondary education and a very slow update of the content of school education;

4. Insufficient level of general and professional competencies of teachers and their low social status (in particular, due to low salaries)

5. Failure to provide a modern, inclusive, digital, and safe environment in general secondary education institutions;

6. Inefficient system of education management and data collection on the quality and status of education.

Regulatory and legal documents

1. The Constitution of Ukraine;

2. The Law of Ukraine On Education;

3. The Law of Ukraine On Complete General Secondary Education;

4. The Law of Ukraine On Local Self-Government in Ukraine;

5. European Qualifications Framework.

1.4.1 Building an effective network of general secondary education institutions

1.4.1.1. Stages of change

• Based on the analysis of demographic processes, as well as existing infrastructure and infrastructure destruction, create a map of the prospective network of general secondary education institutions in each region. Periodically update the map of the prospective network of general secondary education institutions, taking into account possible new destruction and damage to educational institutions.

• By 2027, gradually update the existing network of educational institutions in each region, in accordance with the map of the prospective network of general secondary education institutions.

• Rebuild the destroyed educational institutions in accordance with the updated map of the prospective network of general secondary education institutions in each region. Rebuild damaged educational institutions according to the principle of “build back better”, in accordance with the updated map of the prospective network of general secondary education institutions.

• In settlements where there are destroyed educational institutions, arrange digital educational spaces to provide access to education for learners with further integration of these spaces into general secondary education institutions or the education system.

• When designing, constructing, and equipping educational spaces, use modern architectural and design solutions, which, in particular, include the universal design of a general secondary education institution, as well as the availability of a shelter in which the educational process can take place.

• Modernize the existing shelters of general secondary education institutions, turning them into high-quality educational spaces that can be used, including in peacetime.

• Invest in the material and technical base and professional development of teachers of basic general secondary education institutions to improve learning conditions and the quality of the educational process in them, creating a modern educational environment.

• Describe the most successful models of cooperation between branch schools and hub schools. Scale their experience to other general secondary education institutions.

• Form a network of academic and vocational lyceums of specialized secondary education at the regional level (on the basis of secondary schools, vocational, and professional pre-university education institutions).

• Provide for the possibility of conducting a pilot experiment to create multidisciplinary lyceums (such as high schools in the United States, the United Kingdom, and Canada) with the possibility of choosing a learning trajectory and transferring credits upon admission to higher education institutions.

1.4.1.2. Regulatory and legal framework

• Envisage an update of the educational subvention formula that would stimulate the development of the network of general secondary education institutions and ensure that the funds released (through optimization) can be used to modernize the educational process and pay teachers.

• Amend the legislation to introduce differentiated approaches to the formation of a network of lyceums (depending on population density and the duration of travel to educational institutions in different communities, the quality of basic institutions).

• Update the Regulation on Lyceums to ensure high-quality education.

1.4.1.3. Funding

• Provide targeted subventions to strengthen the capacity of hub schools and lyceums.

• Provide funding for digital educational spaces.

• Providefunding for the construction of new and reconstruction of destroyed general secondary education institutions, as well as for the renovation of their material base at the expense of state and local budgets, donors, and other sources.

1.4.1.4. Institutional changes

No changes are required.

1.4.1.5. Criteria for assessing the success/failure of the reform

• An effective network of general secondary education institutions has been formed, which ensures adequate quality and accessibility of education, as evidenced by the survey results.

• Accessibility of primary education institutions in rural areas as close as possible to the child's place of residence is ensured. School buses have been organized to transport students from rural areas to hub gymnasiums and lyceums.

• Educational gaps between students in rural and urban areas and between students from different social groups have been reduced, as evidenced by national and international monitoring studies.

• An effective formula for educational subventions has been created that takes into account the specifics of the regions and meets the needs of communities in terms of teacher salaries.

• 100% of general secondary education institutions are provided with shelters suitable for the educational process.

• By the end of the 2026-2027 academic year, a network of academic and vocational lyceums will have been established.

• Each educational institution is equipped to teach children with special educational needs.

1.4.2. Areas of change: Overcoming educational losses and educational gaps

1.4.2.1. Stages of change

• Develop and implement policies to compensate for educational losses and bridge educational gaps in a manner that recognizes children's personal experiences.

• Develop test diagnostic materials for assessing educational losses and gaps, identifying the knowledge base to be adapted for testing.

• Develop training gamified educational digital resources to compensate for educational losses and bridge gaps in various subjects for different age groups.

• Create an open platform for educational consultations to compensate for educational losses and bridge gaps.

• Envisage additional hours of work for teachers to conduct individual and group lessons.

• Introduce adapted educational programs for students with similar learning gaps, including students from the de-occupied territories.

• Organize summer schools for students who need additional classes to strengthen their educational capacity for further effective learning while taking into account the possibility of summer recreation.

• Introduce blended learning technologies in secondary education institutions that have limited human resources and material and technical resources, which make it impossible to provide access to quality education. At the same time, the best online resources should be used to explain new educational material (e.g., VSE), and the teacher should provide explanations of unclear material and feedback and assessment

• Provide targeted professional training for teachers to master tools for overcoming educational losses, including the development of an individual student's educational trajectory, psychological and pedagogical support, and adaptation to the new learning environment.

1.4.2. 2. Regulatory and legal framework

• Amend the current legislation to define the concepts of “educational losses” and “educational gaps”.

• Provide legal grounds for the recognition of educational results obtained in the education systems of other countries (except the aggressor country).

1.4.2.3. Funding

• Provide the necessary additional funding for the organization of educational loss and gap assessment, the creation of an open platform for educational consultations, training gamified educational digital resources, the organization of summer schools, and the payment of additional teachers' labor.

1.4.2.4. Institutional changes

No changes are required.

1.4.2.5. Criteria for assessing the success/failure of the reform

• Tools for identifying educational losses and gaps based on the knowledge corpus in different subjects and key competencies for different age groups are available.

• Digital materials, adapted programs, and a national tutoring platform have been developed and implemented to help compensate for educational losses and bridge gaps. Teachers and students are actively using these tools.

• A series of monitoring studies on the progress in overcoming educational losses and gaps have been conducted, with the results indicating a decrease in them.

• National and international comparative monitoring studies show a decrease in the difference in the level of education between different groups of students.

1.4.3. Areas of change: Quality implementation of the New Ukrainian School Reform

1.4.3.1. Stages of change

• To accelerate the systemic implementation of the reform:

• Organize systematic targeted professional training for teachers of grades 5-6 to work according to the new State Standard, as well as to master the methods of problem-solving, research, social and emotional learning, and partnership pedagogy. For this purpose, it is necessary to ensure that all teachers take a relevant remote training course and prepare instructors who will conduct face-to-face training at regional institutes of postgraduate pedagogical education.

• At the expense of donors or an appropriate subvention, equip classrooms for grades 5-6 and print appropriate textbooks for students. Prior to printing the textbooks, improve their quality and correct errors by analyzing feedback from teachers who have already worked with them.

• Resume support for pilot general secondary education institutions that are testing the implementation of the new State Standard by developing model curricula for grades 7-9 and their teaching and learning materials, equipping classrooms, and providing allowances for teachers in the pilot testing experiment (similar to the way it was done at the primary school level).

• Develop the concept of a senior specialized school (academic and vocational lyceum).

• Develop a State Standard for specialized secondary education. Harmonize the standards of higher education and the new State Standard of specialized education. Envisage the possibility of crediting high school results as ECTS credits in higher education institutions.

• Update the content of education in view of the post-war situation in the country:

• Introduce competency-based learning in the study of subjects (integrated courses) and emphasize the development of soft skills;

• Ensure that the content of education is Ukraine-centered (revise such subjects as the history of Ukraine, geography, literature, art, and languages (separately or as part of integrated courses);

• Strengthen the science and mathematics component of education (development of innovative competence, which is important for the post-war reconstruction of the country);

• Update the study of subjects (integrated courses) that provide training in civil defense (Defense of Ukraine, etc.);

• Update the content and approaches to physical education in educational institutions, and develop interschool sports competitions.

The post-war need to update the content of education, build students' resilience and soft skills, and update the network of institutions could be successfully addressed by accelerating the implementation of the NUS reform. Currently, the New Ukrainian School students are scheduled to graduate from the 12th grade in 2029-2030. However, in 2019, a World Bank study was completed, which confirmed the progressiveness of the reform and launched negotiations between the government of Ukraine and the World Bank on funding the acceleration of the reform.

Accelerating the reform and introducing the 12th year of study will help synchronize the duration of full general secondary education with the European space.

• Develop formative assessment tools for various subjects and courses, in accordance with the expected results set by state standards, so as to provide feedback to students and motivate them to learn. 

• Provide an end-to-end introduction of socio-emotional learning to develop the soft skills and resilience of students.

• Introduce mandatory testing to help students with career guidance and their choice of educational path. Introduce a new position of career counselor.

• Develop the design of a pilot project in senior specialized schools for cooperation with higher education institutions.

1.4.3.2. Regulatory and legal framework

• To enable grouping in the teaching of integrated subjects, amend the Order of the Ministry of Education and Science of February 20, 2002, No. 128.

• To determine bonuses for teachers piloting the new State Standard of Basic Education, amend the Resolution of the Cabinet of Ministers of Ukraine of March 23, 2011, No. 373.

• To regulate new approaches to the assessment of learning achievements, develop a regulatory framework for the assessment system (summative and formative) in different educational fields.

1.4.3.3 Funding

• Provide a state subvention for targeted professional training of teachers who provide basic and specialized secondary education to work according to the State Standard, as well as for the equipment of classrooms for classes that will study in the NUS.

• Provide bonuses for teachers and upgrade the learning environment in pilot classes that test the new state standard (similar to what was done at the primary school level).

• Envisage further expenditures in 2026-2027 on the preparation and piloting of the State External Independent Assessment (ДПА) in the form of the External Independent Testing after grade 9.

• Provide additional funding for the introduction of the 12th grade in 2029-2030.

1.4.3.4 Institutional changes

• An implementation agency should be established at the expense of donors to consolidate and coordinate the efforts of state and local authorities and donors to implement the New Ukrainian School reform.

1.4.3.5. Criteria for assessing the success/failure of the reform

• The content of education and its teaching and methodological framework have been updated.

• Textbooks for classes taught according to the new State Standards have been printed, electronic versions of materials (notebooks) for students, and methodological guides for teachers based on model curricula have been developed.

• All teachers and heads of educational institutions have undergone targeted professional training to help them transition to the new State Standards.

• Targeted subventions from the state budget were allocated to local governments to equip classrooms where students are taught according to the new State Standards, as well as to introduce problem-based, investigative, and active learning.

• Support for pilot schools that are one year ahead of the new State Standards has been restored.

• The State External Independent Assessment was introduced through external testing for graduates completing basic general secondary education.

• The reform is coordinated by a single center (implementation agency) to consolidate the efforts of a large number of stakeholders.

• Methods for identifying students' professional inclinations and career guidance have been introduced to more effectively determine their future educational trajectory.

• National monitoring studies reveal an improvement in students' educational outcomes in line with modern learning needs under the new State Education Standards.

• Ukraine is improving its results in the international PISA 2028 study, which will cover 15-year-old students who have studied according to the new State Educational Standards.

1.4.4. Areas of change: Professional development and raising the social status of teachers

1.4.4.1 Stages of change

• Social status of teachers:

• Implement the Law of Ukraine On Education gradually in terms of remuneration, whilst concurrently reforming the system of remuneration for teachers.

• In order to increase teachers' salaries substantially, review the teacher's function and the principles of calculating teacher salaries, increase the structurally updated teaching load (lessons, mandatory offline and/or online individual and group consultations, etc.), and consolidate small classes.

• Provide social housing for young teachers, and introduce other motivational factors for young teachers to enter the profession (internships, financial incentives, etc.).

• Professional development of teachers and training of future teachers:

• Streamline the demonopolized in-service training market; introduce criteria and requirements for teacher in-service training courses, with the results of the training being recognized automatically based on the relevant information entered into the Unified State Electronic Database on Education. The in-service training of teachers in such courses can be funded through the state or local budget.

• On the basis of teachers' professional training centers and institutes of postgraduate pedagogical education, provide counseling support for teachers in self-assessing their own competencies and building an individual strategy for professional growth, as well as psychological support for teachers and ensuring the psychological well-being of teachers in a full-scale war.

• Organize professional training for teachers who provide basic and specialized secondary education to work in the New Ukrainian School, in particular, in psychological support for students and the use of formative assessment. Priority should be given to the professional training of teachers in grades 5-6.

• Adopt new standards for higher education developed on the basis of a modern professional standard for teachers and ensure quality teacher training based on these standards. Ensure that teacher training programs include the development of all general and professional competencies of teachers. The volume of the practical component of teacher training should constitute at least 30% of the total volume of the educational program. Introduce a program to support the creation of competitive educational programs for future teachers in higher education institutions.

• Provide state support for teacher training for teaching integrated courses, as well as for teachers qualified to teach several subjects, in particular, in interdisciplinary educational programs.

• Stimulate the introduction of pedagogical internships in general secondary education institutions and promote mentoring.

• Gradually replace teacher certification with external certification based on a new professional standard for teachers.

• Develop programs to provide teachers for the deoccupied territories, including by incentivizing teachers to work in the deoccupied territories in urgently needed specialties, as well as retraining workers in other fields.

• Create a flexible system of support to retrain and adapt war veterans, in particular, to work in the education system.

• Professional development of educational managers:

• Introduce certification for heads of educational institutions to determine additional incentives or salaries during the transition to the new remuneration system.

• Develop high-quality professional development programs for educational managers and ensure that school administrators take them.

• Ensure Ukraine's participation in the international TALIS study of school principals and teachers.

1.4.4.2. Regulatory and legal framework

• Adopt new standards of higher education and educational programs for teacher training developed on their basis, based on the modern professional standard of a teacher.

• Introduce the position of a special educator into the Classifier of Occupations and update the regulations on the training and functions of a teacher's assistant.

1.4.4.3. Funding

• Provide remuneration for mentors for working with young teachers.

• Raising teacher salaries will require additional expenditures from the state budget, despite the revision of the teacher's function and the principles of salary calculation, the increase of the structurally updated teacher workload to 22 hours, and the consolidation of small classes.

1.4.4.2. Regulatory and legal framework

• Adopt new standards of higher education and educational programs for teacher training developed on their basis, based on the modern professional standard of a teacher.

• Introduce the position of a special educator into the Classifier of Occupations and update the regulations on the training and functions of a teacher's assistant.

1.4.4.3. Funding

• Provide remuneration for mentors for working with young teachers.

• Raising teacher salaries will require additional expenditures from the state budget, despite the revision of the teacher's function, the principles of salary calculation, the increase of the structurally updated teacher workload to 22 hours, and the consolidation of small classes.

• Providing social housing for young teachers, as well as introducing other incentives for young teachers to enter the profession (internships, financial incentives, etc.) will require additional expenditures from the state budget.

• Ensure expenditures from the state and local budgets for the professional training of teachers.

• Provide funding from the state and local budgets, as well as other sources, for a retraining program for war veterans.

• Provide funds for the participation in international TALIS study.

1.4.4.4. Institutional changes

Establish special teacher training programs for the NUS based on interdisciplinary rotation at research universities, which will eventually replace pedagogical institutes and universities.

1.4.4.5. Criteria for assessing the success/failure of the reform

• Increased share of young teachers in secondary education institutions.

• Increase in teacher salaries.

• Increase in the average EIT score of those applying for pedagogical specialties in higher education institutions, competitive admission.

• Employment of graduates of pedagogical educational programs in educational institutions is at least 80%.

• Surveys show that teachers are ready to implement new state standards.

• More than 30% of heads of educational institutions have successfully passed certification.

• Surveys confirm that educators are satisfied with the opportunities for quality professional development.

1.4.5. Areas of change: Building a modern inclusive, digital, and secure environment

1.4.5.1. Stages of change

• Introduce end-to-end digitalization of education and develop new digital resources that will allow access to quality education and individualized learning:

• Provide all general secondary education institutions with high-speed internet;

• Provide laptops for teachers and tablets for students;

• Introduce the use of digital tools for document management and create an integrated electronic management system;

• Develop a digital electronic platform that will become a single point of search for electronic educational resources, including lessons (All-Ukrainian School Online), multimedia, methodological and testing materials for assessment of various learning outcomes in accordance with the State Standard, as well as thematic blocks for different age groups;

• Create educational and methodological digital kits for basic and high schools.

• Provide educational institutions with teaching and methodological kits that include a textbook (printed and electronic), a student workbook (electronic or printed), and a teacher's manual (electronic). A prerequisite for the textbook to be admitted to the competition is its testing and a subsequent content revision based on feedback provided after testing.

• Develop and approve new standards for the learning environment (in particular, for laboratories).

• Provide modern equipment for laboratories, as well as specialized classrooms for studying subjects (integrated courses) in the natural sciences, technology, arts, and physical education.

• The architectural designs of educational institutions should include the creation of a barrier-free environment and robust shelters in which the educational process can take place (including in peacetime).

• Use modern architectural and design solutions when designing, constructing, and equipping educational spaces, which, in particular, include the presence of a shelter where the educational process can take place.

• Modernize the existing shelters of general secondary education institutions, turning them into high-quality learning spaces usable in peacetime.

• Develop a school psychological service to offer psychological support and facilitate adaptation for different categories of students with different experiences during the full-scale war and varying degrees of trauma.

1.4.5.2. Regulatory and legal framework

• Amendments to the State building code of Ukraine B.2.2-3:2018 Educational institutions. Buildings and facilities.

• Change the regulatory framework for the creation, expert examination, and provision of quality textbooks, which envisages a full cycle of creation of educational materials, teacher selection, independent examination, and timely procurement.

1.4.5.3. Funding

• Provide expenditures for the provision of modern equipment for laboratories, as well as specialized classrooms for studying subjects (integrated courses) in the areas of natural sciences, technology, arts, and physical education.

• Provide funding to create a zero-barrier environment and modernize safe shelters.

• Provide funds to purchase laptops for teachers and tablets for students.

• Allocate funding for the creation of digital teaching kits for basic and high schools.

All costs can be covered by the state budget and/or donor funds.

1.4.5.4. Institutional changes

• Redistribute the functions of examination of teaching and learning materials and their procurement between the Institute for Modernization of the Content of Education and the Ukrainian Institute for Education Development.

• Separate the functions of examination and procurement of textbooks to avoid conflicts of interest.

1.4.5.5. Criteria for assessing the success/failure of the reform

• Availability of high-speed Internet in schools by 2024.

• By 2025, more than 80% of teachers and students are provided with laptops and tablets, respectively.

• Digital educational and methodological kits for basic and high schools are available.

• New standards for the learning environment have been created.

• Shelters in 100% of general secondary education institutions are equipped for the educational process.

• There is a school psychological service for psychological support and adaptation of different categories of students with different experiences during the war and varying degrees of trauma, with services available to students in all general secondary education institutions in Ukraine.

1.4.6. Areas of change: Improving the education management system and data collection on the quality and status of education

1.4.6.1. Stages of change

• Implement and update the Strategy for the Development of Educational Assessments in the Field of General Secondary Education in Ukraine until 2030, which, in particular, includes

• Ukraine's participation in the international studies PISA, PIRLS, TIMSS;

• Conducting the State External Independent Assessment with standardized tasks after completion of each level of secondary education;

• Conducting local monitoring studies using a standardized instrument (in particular, after grades 6 and 8).

• Take into consideration the necessity of monitoring studies on educational losses and gaps to adjust educational programs and develop effective methods of overcoming educational losses and gaps at the individual and group levels.

• Develop an information system that displays data on the individual educational trajectory of each student and his/her educational achievements (including full and partial competencies).

• Create a unified platform for conducting educational assessments, as well as for accumulating data on the results of these assessments. This platform should contain data on all assessment and monitoring results (including an opportunity for each student to view the final results of the State External Independent Assessment and the results of each particular task). The Ukrainian Center for Educational Quality Assurance is to be appointed as the administrator.

• Modernize the system of collecting and processing statistical information in the field of general secondary education to ensure that data can be presented in the Eurostat/OECD formats, as well as in other formats necessary for informed decision-making on the development of the general secondary education system.

• Revise the procedures for assessing the safety of the environment to reflect new challenges (remote learning, security conditions, and shelters).

• Conduct training for representatives of school founders and managers on the legislation on full general secondary education, their powers, autonomy of educational institutions, and cooperation.

• Provide support to school principals for the practical implementation of the internal system of quality assurance.

• Establish service centers to serve the basic needs of educational institutions (in particular, for bookkeeping, power grid maintenance, campus janitorial services, etc.)

1.4.6.2. Regulatory and legal framework

• Amend the Laws of Ukraine On Local State Administrations, On Local Self-Government in Ukraine, and other legislative documents that would specify the mandate of local authorities to “resolve issues of education and science”, to exercise state control over compliance with legislation on education, and to manage educational institutions, bring them in line with the Laws of Ukraine On Education and On Complete General Secondary Education, and expand the academic, organizational, personnel, financial and economic autonomy of educational institutions.

• Develop legal mechanisms and requirements for the establishment, operation, and development of corporate general secondary education institutions.

1.4.6.3. Funding

• The proposed changes to the governance system do not envisage changes in the amount of public funding for state and local education authorities and institutions providing full general secondary education. At the same time, additional funding, including off-budget funding for organizational and other expenses, pilot projects, monitoring of the reform results, etc. would accelerate the development of detailed proposals for the necessary changes, their negotiation and harmonization with all stakeholders.

• Provide funding for Ukraine's participation in international studies such as PISA, PIRLS, and TIMSS.

• Provide funds for conducting the State External Independent Assessment after each level of secondary education as well as for local monitoring studies using a standardized instrument (in particular, after grades 6 and 8).

• Allocate funds for an information system that displays data on the individual educational trajectory of each student along with a single platform for conducting educational assessments and accumulating data on the results of these assessments.

• Fund the creation of service centers to serve the basic needs of educational institutions.

1.4.6.4. Institutional changes

No changes are required.

1.4.6.5. Criteria for assessing the success/failure of the reform

• Ukraine has participated in PISA 2025 and 2028, PIRLS 2026, TIMSS 2027, TALIS 2024 and 2030. Ukraine has improved its ranking by PISA-2028.

• The State External Independent Assessment with standardized elements has been conducted annually since 2024. The analysis of the results is factored into the formation and adjustment of education policy.

• All schools actively use formative assessment tools, as evidenced by the results of the NUS reform implementation study.

• The quality of management of educational institutions is improving, as evidenced by the results of institutional audits by the SES.

• Since 2027, a single platform for educational assessments has been in place, which reflects, among other things, data on the individual educational trajectory of students.

1.4.7. Communication of reforms to society

• Overcoming educational losses and bridging gaps will also require a communication effort among the two target audiences: teachers and parents. With the advent of catch-up tools, it is important to inform parents as well as teachers about them and their availability. Teachers need to understand the importance of using them and encourage students to do so. It is also important to educate parents about the value of knowledge and competencies for their children's future.

• A public communication campaign on the changes envisaged by the New Ukrainian School reform is needed across all stakeholders (teachers, parents, employers), in particular, on the added value of the new state standards and the extension of the senior high school.

• Closing undersized rural schools or downgrading them to branch schools is an unpopular step. It should be accompanied by explanatory work with parents and other stakeholders about the need for network reform to improve the quality of education.

• Another unpopular step is to introduce the State External Independent Assessment after grade 9 in 2027, as well as to create a network of vocational and academic lyceums. Such changes should also be backed by a communication campaign aimed at parents and teachers who may be negatively disposed toward these innovations.

• The reform of teacher remuneration is unpopular because of the revision of the teacher's functionality, the principles of salary calculation, the increase in the structurally updated teacher workload, and the consolidation of small classes. The process should be accompanied by a comprehensive communication campaign.

• Regulation of the demonopolized in-service training market will provoke resistance from dishonest providers and teachers. Streamlining should be supported by effective communication and an incentive for teachers and heads of educational institutions to undergo in-service training with professional providers who offer quality training.

• Conducting the State External Independent Assessment with standardized testing after graduation from primary school is a sensitive topic for teachers. Indeed, in primary school, a child is taught by one teacher, so the results of the state examination are considered an assessment of their pedagogical prowess. Teachers can overload students with homework to prepare for the State External Independent Assessment and create a stressful testing situation for students. Parents may also deem testing younger children unfavorable. Therefore, an information campaign about the 4th grade State External Independent Assessment among parents and teachers is needed. Its purpose is to explain that testing will contribute to the future success of the student and will not affect his/her learning trajectory.

5. 1.5. RED LINES WHICH CANNOT BE CROSSED IN THE FIELD OF SECONDARY EDUCATION

• Violation of the principles of state policy in the field of education, principles of educational work, and rights of participants in the educational process, as defined by the laws of Ukraine.

• Slowing down the reforms necessary for the development of general secondary education due to their unpopularity, in particular: the transition to 12-year full general secondary education, changes in the management system, and increasing the level of autonomy of general secondary education institutions.

• Imitation of the implementation of the general secondary education reform and its discrediting due to the lack of further real changes within the NUS.

• Reduced funding for complete general secondary education and a lack of funding to provide general secondary education institutions with modern educational equipment.  

• Strengthening state regulation and interference of public administration bodies in the operation of general secondary education institutions through mandatory “recommendations”, additional forms of inspections, supervision, and control, which are not provided for by law.

• Imitation and inhibition of the reform of the system of institutional care and upbringing of children (deinstitutionalization).

• Spreading pro-Russian imperial narratives in the educational process. 

• Attempts to revise the language policy in the educational process to reduce the teaching of the Ukrainian language and in the Ukrainian language.

• The abolition of the State External Independent Assessment in the postwar period.

2. 2. POLICY IN THE FIELD OF HIGHER EDUCATION

1. 2.1. STATE OF AFFAIRS IN THE FIELD OF HIGHER EDUCATION AS OF EARLY 2023 

General overview of the Ukrainian higher education system from a comparative perspective

Official statistics on the state of the higher education system are contradictory and unreliable. This is due to the use of various methodologies and rapid changes in certain indicators. According to the State Statistics Service of Ukraine, based on data from the Unified State Electronic Database on Education, the total number of higher education institutions (HEI) at the beginning of the 2020-2021 academic year amounted to 515, and at the beginning of the 2021-2022 academic year, it stood at 386. About 100 of these institutions are colleges that mainly work in the field of professional pre-university education, but are licensed to conduct educational activities under certain educational programs in the field of higher education. 

If we consider only universities, academies, and institutes as higher education institutions, then according to the data as of the beginning of the 2019-2020 academic year (the most recent data provided by the State Statistics Service in this regard), there were 281 such institutions, and the number of higher education students enrolled in them totaled 1,266 thousand people (an average of 4,500 people per HEI), including 1,140 thousand in state institutions (6,030 people per HEI), 18 thousand in municipal institutions (1,290) and 108 thousand in private institutions (1,390). In European countries, according to the European Tertiary Education Register, these figures are higher at about 10.5 thousand students per institution on average across all countries and types of institutions. At the same time, it is necessary to take into account the large variation of this indicator, which even in public higher education institutions can range from less than 100 to more than 3 million students. The number of research and teaching staff amounted to 127.5 thousand people, which corresponds to a student-teacher ratio of 9.9. For most OECD countries, this figure falls within the range of 10-17. 42.3% of Ukrainian students received higher education at the expense of the state budget, 0.9% - at the expense of local budgets, 0.2% - at the expense of legal entities, and 56.6% - at the expense of private individuals.  72% of students received their higher education full-time and 28% part-time, and about 0.1% attended evening courses.

At the beginning of the 2021-2022 academic year, 77% of students in Ukrainian higher education institutions belonged to the age group of 17-22 years, 6% were aged 23-24 years, 4% were 25-29 years old, 10% belonged to the group of 30+ years old, and 3% were under 17 years old. According to Eurostat, the distribution in the EU countries appears to be similar, albeit slightly shifted toward older students. This is due to both the longer duration of secondary education and the fact that some students enter higher education after a break in their studies. Also, some students choose a smaller annual workload and therefore study longer than necessary to obtain relevant higher education degrees.

According to the Law of Ukraine On the State Budget of Ukraine for 2022, the share of the special funds for training programs for specialists with higher education totaled about 40%. This figure roughly corresponds to the share of private funding for higher education. In the OECD countries, the same figure varies from 7.8% in Norway to 76.3% in the United Kingdom. But for most countries, it falls within the narrower range of 15% to 50%.

Network of higher education institutions

One of the problems of the Ukrainian higher education network is the existence of a significant number of institutions offering a large share of educational programs that have a small number of enrolled students. In particular, according to the Unified State Electronic Database on Education, in some bachelor's degree programs (excluding those that are new or being discontinued), the average number of students per course is less than 5. At the same time, similar educational programs may be available in many institutions in the same location. Also, educational programs with a small number of students may be created as a result of higher education institutions not using existing tools aimed at solving similar problems. These tools include offering selective blocks of disciplines instead of separate educational programs, crediting the results of previous, as well as non-formal and informal education, etc.

According to the data from the Unified State Electronic Database on Education, from national and international rankings of higher education institutions, as well as from EU countries, small institutions can be efficient if they implement a small number of related educational programs. In contrast, large institutions with a large number of educational programs that belong to different fields of study and require significant expenditures on various equipment may be much less efficient. A significant increase in the efficiency of both individual higher education institutions and the network at large can be achieved through competitive scientific and applied research and innovative work, the creation of joint educational programs and university alliances, the creation of production sites (particularly joint ones) by universities, etc.

When comparing the given data with similar indicators from EU countries, it is clear that increasing the average size of higher education institutions or reducing the share of students receiving higher education at the expense of the state budget may somewhat contribute to the efficiency of using budget funds, yet cannot be the key determinant of the quality of higher education and its competitiveness in the European and global markets of educational services.

Despite these caveats, optimization of the network of higher education institutions is still relevant. However, the criteria for optimization should not concern the size of the institution or the number of students per academic staff member, but rather the outcomes of the network's educational, research, and other activities. The implementation of a new model of financing higher education institutions, approved by the Cabinet of Ministers of Ukraine on December 24, 2019, No. 1146 On the Distribution of State Budget Expenditures among Higher Education Institutions Based on the Performance of Their Educational, Scientific and International Activities, should assist in this effort. However, after the start of Russia's full-scale aggression against Ukraine, this Resolution was suspended.

It must be emphasized that the reorganization (merger, accession, etc.) of higher education institutions should not be carried out administratively. Any decisions on such reorganization should be made by higher education institutions, taking into account alternative solutions (closure of non-demanded educational programs, creation of joint educational programs, the introduction of a dual form of higher education in certain resource-intensive educational programs, etc.) Nevertheless, government agencies and local governments can facilitate the adoption of such decisions, in particular by offering financial incentives for the merger (consolidation) of higher education institutions, as well as by clarifying the legal requirements for the provision of educational activities by higher education institutions. Excessive unification and integration should also be avoided: international experience shows that both giant universities with several hundred thousand students and small universities with only a few dozen students can find their place in an optimally configured higher education system.

According to the State Statistics Service of Ukraine, at the beginning of the 2019-2020 academic year, 67% of universities, academies, and institutes were state-owned, 5% were municipal, and 28% were private. Today, there are no universities, academies, or institutes that have corporate status under the Law of Ukraine On Education. According to the European Tertiary Education Register, in 2019, the share of private institutions in the Eurozone was higher - 44%, with 45% of them being institutions that are considered private but dependent on the government (i.e., those that receive at least 50% of the total funding for their core activities from the budget, or those where the budget covers the salaries of teaching staff). As of the beginning of the 2019-2020 academic year, according to the State Statistics Service of Ukraine, 90% of students were pursuing higher education at state universities, academies, and institutes, 1.5% at municipal institutions, and 8.5% at private ones. According to the European Tertiary Education Register, this ratio differed significantly in the Eurozone countries in 2019: 77% of students were enrolled in public higher education institutions, and 23% attended private ones. These data show that the private segment of higher education needs to be strengthened and developed. At the same time, this should complement, not replace, the development of public (state and municipal) institutions.

Legal status and types of higher education institutions

The issue of optimizing the network of higher education institutions concerns not only their number and size. The issues of status, regional distribution, and types of institutions are no less (or perhaps even more) crucial. In particular, in the EU countries, it is typical for a public higher education institution to be a public institution. This status is fundamentally different from the status of a budgetary institution, which is held by Ukrainian state and municipal higher education institutions. The definition of this status varies from country to country. But in all cases, it entails the right to independently manage the institution's own revenues and to be the rightful owner of property acquired with its own revenues, which is the basis of the institutional autonomy of the institution and a prerequisite for training professionals capable of making decisions and being responsible for their consequences. In some countries, public HEIs also have the right to own land and capital facilities. In contrast, for Ukrainian HEIs, which are budgetary institutions, any own revenues automatically become part of a special fund of the state budget that can be used only for the purposes specified by the Budget Code of Ukraine, depending on the group of the source of revenues. This limitation restrains the initiatives of state and municipal higher education institutions and prevents them from responding promptly to external challenges and opportunities. 

According to the Law of Ukraine On Higher Education, higher education institutions can be full owners only of intellectual property rights. However, this right is not consistently enshrined in other legislation. 

It should be noted that the status of a public institution (or public organization) should apply not only to education but also to science, medicine, culture, and sports. At the same time, in the field of higher education, the existing legal status of a higher education institution (HEI) should be applied more consistently, regardless of whether it is a legal entity under public or private law. State, municipal, and private higher education institutions sometimes face undue and asymmetric restrictions, in particular in access to funding from the state and local budgets, as well as in property and financial management. Practical, rather than merely declarative, equality of rights for all higher education institutions regardless of their form of ownership, and at the same time a profound reform of the relations between state and municipal higher education institutions and their founders (respectively, state and local governments) in the context of introducing the legal status of a public institution in Ukrainian legislation are two main directions for further improvement of not only educational legislation but also economic, budgetary, tax, civil, etc.

An analysis of the networks of higher education institutions in European countries shows that the vast majority of institutions can be classified into one of the following groups: universities (research universities), universities of applied sciences (technological universities), and graduate schools (this classification is not exhaustive). Research universities mainly implement academic educational programs, while the educational programs of the other two types of institutions are often practical and focused on preparing for specific types of professional activities. Some of these institutions and educational programs are singled out as a subsystem of professional higher education, which provides training at all levels of higher education, including doctoral (educational and scientific). It is worth noting that many European and North American institutions that have the words “technical”, “technological”, etc. in their names are research universities, with the best of them holding leading positions in world rankings of research universities. The Law of Ukraine On Higher Education recognizes four types of higher education institutions: universities, institutes, academies, and colleges. Nevertheless, neither the Law of Ukraine On Higher Education nor other legislative documents provide any clear distinction between these types of institutions. The law divides educational programs into educational and professional, educational and scientific, and educational and creative. At the same time, educational and professional programs can be created in a short cycle, and at the first to second levels of higher education, educational and scientific programs can be created at the second to third levels, and educational and creative programs can be created only at the third level. Meanwhile, most of the educational and professional programs of Ukrainian higher education institutions are closer to academic programs than to professional programs of European universities. Even if they entail the award of a certain professional qualification, this usually happens without verifying whether the competencies (learning outcomes) necessary to carry out the relevant professional activity have been acquired.

In some provisions of the current legislation, the typology of higher education institutions is used to provide certain types of higher education institutions with additional rights and privileges. In particular, according to Article 30 of the Law of Ukraine On Higher Education, a “research university” has the exclusive right to “make the final decision on awarding academic titles” and “receive basic research funding on a priority basis”. Such legal norms create unequal conditions for competition between higher education institutions, in particular in terms of research funding. Instead, such rights should be bound not to the type of institution, but to certain criteria, in particular, the availability of institutional accreditation and the results of state certification in terms of scientific (scientific and technical) activities.

Content and standards of higher education

The Law of Ukraine On Higher Education vests the primary responsibility for the content of education in higher education institutions, which develop educational programs based on the framework standards of higher education, while taking into account the requirements of the National Qualifications and Professional Standards. To date, standards have been developed for most specialties for bachelor's and master's degrees, as well as a significant share of doctoral standards. However, the standards developed at an early stage of this process require updating due to changes in legislation and improvement of the overall methodology. The requirements of the standards should also take into account the recommendations of the EU Council on key competencies for lifelong learning. The list of fields of knowledge and specialties needs to be clarified and harmonized with the International Standard Classification of Education. In particular, this concerns the incomplete coverage of ISCED subject areas, as well as the presence of a significant number of specialties that, according to ISCED, should be either educational programs within other specialties or interdisciplinary educational programs. Another problem arises from the fact that higher education institutions often proclaim requirements for learning outcomes that meet these standards, yet fail to ensure that these requirements are met in practice.

Quality assurance system in higher education

In 2014, a system of quality assurance in higher education was introduced, based on the general principles of quality assurance in the European Higher Education Area. However, the establishment of both internal and external quality assurance systems encounters great difficulties due to the insufficient level of funding for higher education, the unwillingness of a large part of the educational community to ensure (rather than imitate) quality in accordance with the EHEA principles, etc. The reputation of the new procedures and the National Agency for Quality Assurance in Higher Education is heavily undermined by the insufficient qualifications of a large number of experts, who often evaluate the educational activities of higher education institutions not so much on the basis of legislation as on the basis of their own institutions' usual practices.

Despite significant changes to the Licensing Conditions for Educational Activities in Higher Education, the problems of unclear and/or irrelevant requirements common to a wide range of specialties persist. The conceptual changes introduced in 2016-2020 have somewhat improved the situation, but have not eliminated the main challenges of licensing. The practice of applying licensing since the early 1990s has shown its ineffectiveness as a tool for ensuring the quality of higher education.

Funding of higher education

Higher education funding in Ukraine is not adequately diversified and is burdened by numerous restrictions both in terms of access to different sources of funding for HEIs of different types and status and in terms of financial autonomy of state and municipal HEIs in managing resources from the general fund of the state and local budgets as well as their own revenues. Funding for higher education through grants (vouchers) and subsidized loans remains underdeveloped. Budget funding of higher education institutions does not separate funds allocated by the state and local governments acting as founders of higher education institutions and as commissioners of their services.  Due to outdated legislation, in particular budget legislation, and the established practices within higher education institutions that have been tailored to it, students have limited opportunities to shape their own educational trajectories, in particular in terms of planning the duration of their studies and the number of ECTS credits they take per academic year or semester. Ukraine does not employ the traditional EU concepts of “full-time” and “part-time” students. At the same time, budget funding standards are based on the planned “cost” of training a “typical” student. The planned “cost” is determined by the funds available, not by the real requirements for financing quality education, and the cost of training for those enrolled on a contract basis is often significantly lower than this figure.

The state-guaranteed bonuses for academic degrees and academic titles do not stimulate the improvement of productivity and quality of work of academic staff. On the other hand, these bonuses actually compensate for the insufficient differentiation of salaries of academic staff with different qualifications and different performance indicators. Even with these bonuses, typical salaries of academic staff in the highest (20-25) tariff categories of the ETS are often significantly lower than the salaries of employees in categories 8-12 of the ETS working in other sectors of the economy, and even lower than the entry-level salaries of graduates without work experience in certain professions. The above is one of the basic reasons for the lack of real competition for most vacancies of research and teaching staff in higher education institutions.

In these circumstances, the existence of guaranteed bonuses for academic degrees and academic titles, which are paid without regard to qualitative performance, encourages many employees to obtain academic degrees and academic titles by any means for the sake of further bonuses secured for many years to come and serves as one of the major factors that increase the temptations for academic misconduct, promote a flood of insipid publications and dissertations, as well as foster the spread of pseudoscience and other negative phenomena. Recovery from this situation is only possible through a significant increase in the financial autonomy of higher education institutions, which should be authorized to determine the salaries of their employees (both by category and individually), depending on the performance and quality of their work. As with the issue of the legal status of higher education institutions, this much-needed reform requires systemic changes to numerous laws and regulations.

There are many problematic and controversial issues regarding the formation and placement of the state education commission. Since 2016, the majority of state-commissioned bachelor’s degrees have been allocated through targeted placement (“broad competition”). Such an approach ensures that the most deserving applicants have a fair chance to enter the most attractive educational programs. At the same time, this leads to the washing out of young people from certain regions, which poses a threat to the region’s future development. This problem has been significantly exacerbated by Russia’s full-scale aggression against Ukraine. Another problem is the distribution of positions of the state commission among various specializations, as it does not reflect the projected needs of Ukraine, as well as possible opportunities to meet the demand for specialists in different fields at the expense of individuals and legal entities. The concept of state commissioning needs to be revised, as it should be limited to a small share of qualifications, in particular, those in the field of security. At the same time, budgetary funding for training specialists in other specialties should be provided through other mechanisms used in EU countries.

The salaries of academic staff need to be raised significantly. Salaries should encourage highly qualified specialists to enter higher education institutions, who are well aware of the current state of affairs and the problems affecting the relevant fields of knowledge and the economy, as well as capable of solving the problems they are supposed to teach students to solve. That is, however, impossible when the salaries of associate professors and professors are sometimes several times lower than the entry-level salaries of the young professionals they train. Under such circumstances, some legislative requirements, in particular the Licensing Conditions for Educational Activities, do not ensure the quality of education in practice but only encourage the imitation of educational and scientific activities.

Management of higher education institutions

The existing system of management at higher education institutions is in dire need of improvement. Joint functions of the body that ensures the formation and implementation of the state policy in the field of higher education with the licensing functions and powers of the founder (and, according to some legislative documents, the owner) of most state higher education institutions give rise to conflicts of interest, in particular, in the issues of licensing of educational activities. 

Higher education institutions do not maintain an effective balance of powers and responsibilities between different governing bodies and public self-government. Primarily, this is due to the preservation of the Soviet status of the head of an institution as well as the principle of sole authority, which are not typical for higher education institutions in EU countries, where different models are used to balance the powers of governing bodies through checks and balances. 

The legislation, on the one hand, overregulates the structure and powers of the governing bodies of higher education institutions, and yet, fails to ensure a balance and clear delineation of powers and responsibilities between different governing bodies and self-government of higher education institutions. The norm stipulating that the powers of governing bodies are determined exclusively by the Law of Ukraine On Higher Education or the charter of the institution has no validity, since in practice much of the authority of the head, the academic council, and other governing bodies of higher education institutions is regulated by other laws or bylaws. At the same time, often cases occur when neither the law nor the charter provide any of the governing or self-governing bodies of the HEI with the authority to pass the necessary decisions.

Another major imbalance in the management of higher education institutions stems from the lack of full institutional autonomy. In particular, the head of the institution (the rector) is elected by the staff based on the proposed program of institutional development. However, the rector remains accountable primarily to the founder, with whom they enter a contract, setting targets and relevant deadlines. Nevertheless, the targets do not necessarily have to correspond to the program on which the candidate was selected.

Legislation on higher education and the need for its further improvement

The adoption of the new Law of Ukraine On Higher Education in 2014 and further significant amendments to this law was a notable milestone in the reform of higher education.     

Important ideas and trends in higher education reform included

• Ensuring the quality of higher education in accordance with the Standards and Recommendations for Quality Assurance in the European Higher Education Area, creation of the National Agency for Quality Assurance in Higher Education, as a body that provides external quality assurance through evaluation and accreditation of educational programs, independent of the Government and higher education institutions;

• Introduction of a “broad competition” for admission to higher education to ensure fair access to higher education, as well as expanding the applicability of external independent testing in higher education (the Unified State Qualification Exam for bachelor's and/or master's graduates in certain specialties, the Unified Professional Entrance Exam and the Unified Entrance Exam for admission to master's programs);

Legislation on higher education and the need for its further improvement

The adoption of the new Law of Ukraine On Higher Education in 2014 and further significant amendments to this law was a notable milestone in the reform of higher education.     

Important ideas and trends in higher education reform included:

• Ensuring the quality of higher education in accordance with the Standards and Recommendations for Quality Assurance in the European Higher Education Area, creation of the National Agency for Quality Assurance in Higher Education, as a body that provides external quality assurance through evaluation and accreditation of educational programs, independent of the Government and higher education institutions

• Introduction of a “broad competition” for admission to higher education to ensure fair access to higher education, as well as expanding the applicability of external independent testing in higher education (EDKI for bachelor's and/or master's graduates in certain specialties, EMI and EQEP for admission to master's programs); 

• Significant increase of academic autonomy and responsibility of higher education institutions, in particular regarding the determination of the educational curriculum in accordance with the competency framework standards of higher education, organization of the educational process, awarding academic qualifications, recognition of non-formal and informal learning outcomes, etc;

• Implementation of European and international documents in the legislation and practices of higher education institutions, in particular, in terms of harmonizing the list of fields of knowledge and specialties with ISCED, harmonizing the requirements of higher education standards and educational programs with the requirements of the National Qualifications Framework, the introduction of the ECTS, etc;

• Changing the system of higher education management, reducing the authority of the Ministry of Education and Science, and transferring some of its powers to higher education institutions, the SQA and NAQA;

• Improving the management system in higher education institutions, increasing the influence of collegial bodies and public self-government bodies on decision-making;

• Increasing the academic freedom of academic staff, in particular, in terms of choosing the specific components of educational curriculum, teaching methods, forms of monitoring, etc;

• Increasing the academic freedom for students, ensuring their right to individual educational trajectories and individual curricula, recognizing the results of non-formal and informal education and learning outcomes obtained through academic mobility;

• Deregulation of the system of professional training for academic staff, granting them considerable freedom in choosing institutions that provide professional training, their educational programs, recognition of non-formal learning outcomes, etc;

• Increasing the control of employers over the formation of educational policy, the curriculum, and assessment of learning outcomes;

• Stimulating the betterment of educational, scientific, and international activities among higher education institutions through a formulaic distribution of budget funding and master's degree positions commissioned by the state;

• Improving the funding of higher education institutions by aligning tuition fees paid by individuals and legal entities with the real cost of education;

• Introduction of new forms of higher education, including dual and network education, which should facilitate the interaction of higher education institutions with employers and other institutions for the joint implementation of educational programs.

Nevertheless, legislation in the field of higher education requires further improvement. In particular, the legislation must reflect the results of the development of higher education systems in the European Higher Education Area, including Ukraine, in terms of: requirements for systems and procedures for ensuring the quality of higher education, institutional autonomy of higher education institutions, and further deregulation, academic freedoms for participants in the educational process, governance within higher education institutions, funding of higher education, etc. There are many contradictions and conflicts between the legislation in the higher education sector and the legislation governing other areas. This primarily concerns budgetary and tax legislation, legislation on the management of state-owned and municipal property, as well as the use of outdated norms and terms in many relevant laws that regulate certain segments of higher education (healthcare, military training, police, and public service training, etc.), imposing requirements on higher education institutions or educational curricula, and establishing certain social norms (pensions, vacations, etc.).

2. 2.2. VISION OF HIGHER EDUCATION IN THE PERSPECTIVE OF 2030, INCLUDING MEASURABLE INDICATORS 

2.2.1 Principles of state policy in higher education 

The state policy in higher education is based on a clear delineation of the roles of the state as

• A legislator that sets the basic rules for the functioning of the higher education system;

• The subject of supervision over the observance of legislation in the field of higher education;

• One of the major sources of funding (commissioners) for education and research in the higher education system;

• Founder of a part of higher education institutions.

2.2.2 Higher education institutions 

The legislation establishes a special type of legal entity, “higher education institution” with the core activity of providing higher education and research. 

Higher education institutions established as legal entities of public and private law have equal rights and powers: broad institutional (academic, financial, organizational, and personnel) autonomy, the right to own property, the right to budgetary funding of educational activities on a competitive basis, a uniform taxation mode, the right to use land, the right to receive state and/or municipal property for use and/or economic management for educational and research activities, the right to independently dispose of all funds received.

Higher education institutions have a clearly defined mission and strategy that is shared by both the communities within the institutions and their external partners and communities. These missions and strategies define the primary goals of the institution in terms of teaching, research, and contribution to solving social and economic problems of society, and the success of their implementation affects the performance and competitiveness of each institution.

Higher education institutions are an environment for the intellectual development of individuals, study, and explanation of the world around them, drivers of innovation and the basis for social transformation and economic growth in Ukraine and Eastern Europe as a whole, important platforms for professional discussion of crucial social issues of their communities and regions, development of solutions and support of democratic processes in Ukraine.

Higher education institutions maintain a high level of trust, as evidenced by the results of public opinion polls, as well as by the level of funding from businesses and international partners, and the number of foreign students and teachers.

Ukrainian higher education institutions are integrated into the European education and research space. A significant number of master's and doctoral degree programs are offered in English, created in partnership with higher education institutions in the EU, the US, Canada, and other OECD countries.

Higher education institutions create and implement higher education curricula, and may also provide vocational and general secondary education and non-formal education programs independently or in cooperation with other legal entities. 

The right of higher education institutions to carry out any educational activity is determined by the principles of academic autonomy of the institutions and the licenses and accreditation certificates (if necessary). When designing educational curricula (their content, learning outcomes, forms of education, teaching methods, staffing, and logistical support), higher education institutions determine the objective of the relevant program, considering the priorities on the labor market, development of the worldview and general competencies of students and/or other persons studying, ensuring the development of knowledge in the relevant subject area through research. The achievement of learning outcomes determined in the process of designing the relevant educational curriculum is guaranteed by the systems of internal and external quality assurance of higher education.

Higher education institutions that provide training at the 2-3 levels of higher education demonstrate accomplishment of recognized results in research, innovation, and/or creative artistic activity in relevant subject areas, taking into account the specifics of such activity in different fields of knowledge and different types of educational programs. Higher education institutions independently decide how to assign different types of work (educational, methodological, scientific, organizational) among employees and structural units. Financing of scientific/research and innovation activities of higher education institutions is performed on the basis of the principles specified in Section 3 “Policy in the field of science and innovation”. The scientific work of faculty members of higher education institutions is remunerated independently of their teaching activities. The requirements for licensing of educational activities and accreditation of higher education programs do not mandate that each faculty member conducts research. Higher education institutions may undergo an evaluation of their research activities and, if the results of such evaluation are positive, receive basic funding for research activities.

2.2.3. Funding higher education

The operations of higher education institutions established as legal entities of public and private law may be covered by

• State budget funds, which are distributed on a competitive basis and are directed to higher education for students under the rules that enable internal and external academic mobility, studying on one's own educational trajectory and at one's own pace of study, establishing funding standards for higher education institutions per ECTS credit, rather than per year of study.

• Allocation of state budget funds for training in higher education institutions on the basis of a state commission of specialists with certain professional qualifications required for work in the public sector, in particular for service as officers (sergeants and sergeants major) and commanders to meet the needs of the Armed Forces of Ukraine, other military formations established under the laws of Ukraine, central executive bodies with special status, the Security Service of Ukraine, the Foreign Intelligence Service of Ukraine, and other intelligence agencies, the central executive body implementing the state policy in the area of state border protection, the Ministry of Internal Affairs of Ukraine, the central executive body implementing the state policy in the area of civil protection, the central executive body implementing the state policy in the area of execution of criminal sentences. Education on the terms of the state/regional commission may impose additional obligations upon the applicant in accordance with the agreement concluded with the commissioner or its duly authorized body.

• Funds of the founder, which are allocated for the maintenance of fixed assets and institutional development of the higher education institution

• Funds from local budgets (local and regional commissioning), which are distributed among educational institutions on a competitive basis for the training of specialists with certain professional qualifications required for work in the public sector;

• Funds from the state and local budgets, which are distributed among higher education institutions on a competitive basis in order to implement state and local targeted programs;

• Grants (vouchers) for higher education issued personally to specific applicants by the state and other grantors;

• Other funds of legal entities and individuals paid to higher education institutions for training, other services related to education, research, scientific expertise, consultations, etc., as well as other services provided by the higher education institution in accordance with its charter and legislation; grants for research;

• Providing students with loans for higher education, including at the expense of the state or local budgets;

• Other sources of funding not prohibited by law.

• This system of multi-channel financing of higher education institutions should ensure

• Financing of ECTS credits, not years of study,

• Academic mobility (to provide bachelor’s, master’s, and Ph.D. students with the opportunity to receive part of their credits in other higher education institutions (research institutions) of their own choice without losing the primary source of funding for their educational program)

• Providing applicants with grants (vouchers) for higher education at the expense of the state/local budget for a period of one year to the usual term of obtaining the relevant level of higher education, which are distributed based on the results of the EIT, as well as social indicators and other factors.

2.2.4. Academic community

The academic community is driven by the desire to achieve excellence in learning, teaching, and research rather than formal compliance with criteria; the principles of academic freedom, university autonomy, integrity, and inclusiveness, as well as the integration of the academic community into the economic and social life of the community, are paramount.

The final decision on awarding academic degrees and academic titles to individuals is passed by higher education institutions that have this right in accordance with the law. The state does not bear additional financial obligations to persons who have received a degree and/or academic title. The system of remuneration in a higher education institution, including the standards of remuneration of its employees, the procedure for establishing and the amount of bonuses and surcharges, in particular for having a scientific degree and/or academic title, shall be established by the academic council of the higher education institution.

2.2.5. Some further benchmarks to be achieved by 2032:

• According to the QS World University Rankings and The Times Higher Education World University Rankings, at least 3 higher education institutions are in the TOP 500 and at least 6 are in the TOP 100. At least one Ukrainian university is included in the TOP-500 Academic Ranking of World Universities;

• The total number of public (state and municipal) higher education institutions (universities, universities of applied sciences/technology universities, graduate schools) ranges from 80 to 120; 

• The average number of students in public (state and municipal) universities amounts to 8000-10000, in universities of applied sciences/technology universities it amounts to 5000-8000;

• The average share of educational programs jointly implemented by two or more higher education institutions/research institutions, or by a higher education institution and an enterprise (providing for dual form of higher education) for bachelor's and master's degrees is at least 10%;

• The total average expenditure per student of a higher education institution constitutes at least 3500 euros per year;

• The average number of students per academic staff member is 15-20;

• The average salary of research and teaching staff of a higher education institution equals 115-120% of the average salary in the economy in the respective region;

• According to surveys of graduates and employers, at least 70% rate the quality of higher education as high or very high.

3. 2.3 KEY ISSUES TO BE SOLVED TO ACHIEVE THE DESIRED OUTCOMES  IN THE FIELD OF HIGHER EDUCATION 

2.3.1 Admission to higher education institutions

Introduce mandatory external independent testing of general academic competencies (the ability to obtain higher education at the appropriate level) as one of the elements of competitive selection for admission to second-level higher education programs).

Introduce early career guidance in high school, in particular, to identify aptitudes, clarify the application of certain professions in professional life, eliminate stereotypes, including gender stereotypes, and promote STEM.

Narrow the list of categories of people for whom separate procedures are applied when applying for higher education, replacing them with free remedial education with further participation in the general competition.

Enhance the publicity and availability of data on the state of higher education in general and each higher education institution in particular, as well as inform students and their parents about their prospects after graduation.

2.3.2. Higher education institutions

Expand and clarify the functions, rights, and powers of a separate type of legal entity “higher education institution” (HEI) in the legislation, allowing broad institutional autonomy, particularly the right to own and independently manage assets and property and form a separate remuneration system, including bonuses and surcharges. Establish by law that a higher education institution independently determines the model and level of remuneration for its employees within the limits of available funds, and that the collegial governing bodies of a higher education institution approve the annual budget of the institution and monitor its implementation.

Define by law that any person may not be the head of a higher education institution for more than 10 years.

2.3.3 Financing of higher education

Adopt unified approaches to financing educational and research activities in educational institutions, regardless of their form of ownership and subordination.

Introduce a multi-channel system of financing higher education institutions as described above.

Ensure that the distribution of grants (vouchers) for higher education at the expense of the state budget (except for higher education under the state/regional commission) is carried out through a nationwide competition within the fields of knowledge or groups of specialties based on competition scores and priorities set by applicants, as well as on social indicators. Ensure that the allocation of positions under the state/regional commission is conducted by each state/regional commissioner on the basis of a national/regional competition, taking into account the competition score and priorities of applicants, and is subject to the conclusion of an additional agreement between the applicant and the state/regional commissioning body, which may specify requirements for learning outcomes, the duration of study in the relevant educational program, employment upon completion of training, and, in particular, employment of the applicant upon completion of training by a state/regional commissioning body.

Increase the availability of subsidized loans for higher education, introduce the possibility of entering into income share agreements between higher education students and creditors, increase the number of social scholarships, and target them according to income level.

Diminish the impact of the number of students on the amount of public funding available to higher education institutions, instead increasing the impact of the results of educational and research activities, fulfillment of the institution's mission and its international activities (in particular, participation in the activities of international organizations in the field of education and research, academic mobility and the involvement of faculty and researchers from the EU, the US, and Canada).

Secure long-term concessional international financing for infrastructure projects.

2.3.4. Educational process

Increase the flexibility of individual educational trajectories in higher education, define rules for changing the educational curriculum in the course of study, financially incentivize internal and external academic mobility, promote short-cycle programs, recognize learning outcomes corresponding to the level of education obtained through prior formal, non-formal and informal education, in particular through professional experience.

2.3.5 Higher education governance

Strengthen the analytical and communication functions of the MES and other higher education authorities, while reducing their supervisory and licensing powers.

Intensify public communication and efforts to explain changes within the system, develop and share recommendations, and introduce training for managers at various levels.  Reduce the scope of state regulation of higher education institutions, while tightening the requirements for educational activities aimed at awarding/conferring “regulated qualifications” to students. In particular, provide an external independent assessment (the Unified State Qualification Exam) to be used in such cases for the certification of applicants. Transfer the supervisory powers of the Ministry of Education and Science to other state bodies or supervisory boards of public higher education institutions.

Delegate the functions of monitoring compliance with uniform rules in the field of education to selected agencies (NAQA, agencies of financial control, the Antimonopoly Committee, NAPC), leaving the MES in charge of developing uniform rules for the functioning of the education system, as well as the contractor of educational and scientific services and the founder of educational institutions.

4. 2.4. POLICY FOR SOLVING ISSUES IN HIGHER EDUCATION
   IN THE PERSPECTIVE OF 2030

Identification of the problem/group of problems

Problem 1. The suboptimal legal status of higher education institutions, which hinders their development

The status of a budgetary institution implies that the state/municipal higher education institution is maintained by its founder, and that there are significant restrictions on financial autonomy due to this status. This significantly reduces the motivation of both higher education institutions and their partners to cooperate and raise extra-budgetary resources for higher education institutions. This also leads to significant restrictions imposed on the academic, organizational, and personnel autonomy of higher education institutions. 

Problem 2.  Inefficient mechanisms of higher education financing

The mechanisms of public funding of higher education institutions, in particular through the state commissioning of specialist training, do not encourage higher education institutions to provide quality and efficient education and research and are not adapted to the needs of retraining personnel for the post-war development of Ukraine. The norms of educational legislation are not coordinated with the Budget Code, and the Budget Code itself contains inconsistencies regarding the financing of higher education. Due to the war, the CMU resolutions aimed at improving the efficiency of budget funding for higher education have been suspended.

Problem 3. Imperfect legislation on higher education governance at the state, regional and institutional levels

Legislation on governance in higher education at the state, regional and institutional levels either outpaces the evolution of other legislation or lags behind it. It neither fully meets the needs of the education sector nor complies with EU practices. Limitation of regulation of the powers of higher education institution's governing bodies by the Law of Ukraine On Higher Education and the institution's charter, which must be approved by the founder as a new document after any changes are made, prevents quick decision-making and is de facto not implemented, primarily at the legislative level. The legislation encourages the creation of supervisory boards as decorative entities rather than effective governing bodies of higher education institutions. The management relies on imperfect educational statistics, hindering the development of higher education institutions, and does not create effective feedback loops between higher education and other sectors of the economy, nor does it recognize the positive impact of higher education on the socio-economic and cultural development of Ukraine.

Problem 4. The quality of higher education in Ukraine does not correspond to the needs of society and the labor market, as well as to its competitiveness in the global space

Legislation on quality assurance in higher education is based on outdated ESG-2005 requirements and guides higher education institutions to fulfill certain formal requirements (availability of certain documents, tools, procedures) rather than to deliver results. The amount of funding for higher education is insufficient to ensure its quality, and the available funds are used inefficiently. The legislation requires the founder to satisfy the requirements for resource support of educational activities but does not impose liability for failure to do so. The legislation does not fully comply with the ESG-2015 requirement on the independence of external quality assurance bodies from the CMU and higher education institutions.

Problem 5. The network of higher education institutions does not match the needs and capabilities of the state. The educational environment is both physically and morally outdated and does not meet the needs of participants in the educational process

The average number of students in a higher education institution is about half that of the early 1990s and 2-5 times lower than typical values for the EHEA countries. This translates into an inefficient use of budgetary resources for higher education, including the unjustified prevalence of small classes, in particular, due to the fact that students are trained in similar educational programs in geographically close institutions. Additional problems hampering the efficiency of the higher education network are created by the next factors: subordination of state civilian higher education institutions to several central executive bodies; unclear classification of higher education institutions incompatible with the classifications used in the EU and the EHEA; insufficient differentiation of requirements for different types of educational programs, including vocational and academic programs.

2.4.1 Legal status of higher education institutions

2.4.1.1. Regulatory and legal framework

A number of laws need to be amended to ensure the institutional (academic, financial, organizational, and personnel) autonomy of higher education institutions. In particular, amendments to the Civil, Budget, Tax, Land Codes, the Laws of Ukraine On Education, On Higher Education, On Scientific and Scientific-Technical Activities regarding

• The introduction of the status of a public institution (institution) as a non-profit institution established by state or local governments to perform socially significant functions (in particular in the field of education), which manages state or municipal property provided to it on the basis of operational management or full economic control, is the rightful owner of property acquired at the expense of its own revenues, and independently manages its own revenues in accordance with its constituent documents;

• Establishing clear and reasonable criteria for the status of a higher education institution;

• Defining the framework requirements for the specialized activities of higher education institutions, which, in addition to educational activities at the levels of higher education, which shall remain the core, may include educational activities at other levels of education and in the field of out-of-school education and adult education, as well as research, scientific, technical, innovative, cultural, artistic, museum and library activities, as well as activities aimed at the development of Ukraine, its regions and communities, protection of Ukraine, development of physical culture and sports, provision of medical and veterinary services, publishing, etc. (in particular, according to the educational tracks available in the institution);

• The possibility for non-profit higher education institutions of all forms of ownership, except for budgetary institutions, to carry out non-essential economic activities, which should be organizationally and financially or institutionally separated from their core activities;

• The gradual transition of state and municipal higher education institutions towards the status of a public institution, except for those that will remain budgetary institutions in accordance with the Law (military institutions, universities of the Ministry of Internal Affairs, etc.;)

• The right of a public institution to use state/municipal property (land, buildings, and other property) transferred to it by its founder on a preferential basis (similar to the current procedure for budgetary institutions);

• The right of a higher education institution to independently dispose of the budget funds received by it in accordance with the designated purpose and other conditions of budget financing determined by law;

• Determining the requirements for the minimum amount of statutory capital for a public higher education institution, taking into account its size and the fields of knowledge in which specialists are trained;

• Equal rights and obligations of public and private higher education institutions in terms of academic, personnel, and organizational autonomy;

• Equal rights and obligations of public and private higher education institutions to conduct educational and research activities;

• Equal rights of public and private higher education institutions in matters of budget financing of training and research, which is carried out on a competitive basis (except for basic funding from the founders);

• Criteria and legal restrictions on the activities of non-profit higher education institutions of all forms of ownership;

• The right of private higher education institutions to choose between the status of a for-profit and non-profit institution;

• Removal of punitive provisions from the tax legislation, according to which a non-profit institution loses its non-profit status for an indefinite period after any single violation of its income or expenditure regime;

• Equal taxation conditions for non-profit higher education institutions of all forms of ownership;

• Equal rights of higher education students to receive a tax benefit regardless of the form of higher education and the form of ownership within the institution where they receive it;

• The right of higher education institutions, with the exception of budgetary institutions, to independently establish subsidiary commercial structures;

• The right of higher education institutions to independently determine and modify their internal structure;

• The possibility for the founder to impose anti-crisis external management on a higher education institution under the conditions established by law;

• Defining the conditions under which the founder has the right to reorganize a higher education institution by way of transformation, merger, division, demerger, or acquisition of one legal entity by another. One of such conditions may be a request submitted by the staff conference or the collegial governing body of the higher education institution;

• Establishing requirements for openness and transparency of higher education institutions at the legislative level, as well as creating effective tools for prosecuting institutions and individuals who violate the requirements of the legislation on the activities of higher education institutions.

2.4.1.2. Institutional changes

The implementation of the proposed changes requires the revocation or revision of the mandate of central executive authorities and local self-government bodies in terms of

• Appointment of heads of higher education institutions within their jurisdiction and conclusion of contracts with those persons;

• Dismissal of heads of higher education institutions within their jurisdiction and/or termination of contracts with those persons;

• Approving budgets and staffing lists of higher education institutions within their jurisdiction;

• Concluding agreements with higher education institutions regarding the intended purpose and/or other conditions for the use of budget funds distributed on a competitive basis for training, research, etc.;

• Performing the functions of authorized bodies for the management of state property entrusted to higher education institutions.

It is also necessary to amend the bylaws regulating the activities of higher education governing bodies, including the central executive bodies, NAQA, etc., in the part related to the mandates that are subject to change. In particular, this should cover the further transformation of ministries from governing bodies of higher education institutions into agencies responsible for the formation and implementation of state policy in the field of higher education and the introduction of the assessment of the effective utilization of the institutional autonomy granted by the National Agency for Quality Assurance in Higher Education in the course of institutional accreditation of institutions.

2.4.1.3. Funding

The amendments to the status of state and municipal higher education institutions do not in themselves imply any changes in the scope of public funding for higher education. It also does not envisage any changes in the scope of funding for state bodies that have to develop, adopt and implement relevant legislative amendments as well as for higher education institutions. At the same time, additional funding, including extra-budgetary funding for organizational and general expenses, will facilitate the development of detailed drafts of the required changes, their negotiation, and approval by all stakeholders.

Increased institutional autonomy of higher education institutions will result in an increased ability to secure additional extra-budgetary funding.

2.4.2. Mechanisms for funding higher education

2.4.2.1. Regulatory and legal framework

A number of laws need to be amended to ensure the implementation of the proposed changes to the mechanisms of higher education financing. In particular, amendments are needed to the Budget Code, the Laws of Ukraine On Education, On Higher Education, On Scientific and Scientific-Technical Activities regarding

• Allocation of state budget funds, which are (1) distributed on a competitive basis among higher education institutions of all forms of ownership to ensure the delivery of educational activities in the field of higher education; (2) distributed on a competitive basis among higher education institutions and research institutions of all forms of ownership to conduct research in accordance with state targeted programs, (3) are distributed among higher education institutions on the basis of a state commission for the training of specialists in certain professions for employment in the public sector; (4) are transferred to public higher education institutions founded by the state to support their development;

• Allocation of funds from local and regional budgets, which (1) are distributed on a competitive basis among higher education institutions of all forms of ownership to ensure the provision of educational activities in the field as a source of funding for higher education; (2) and are distributed on a competitive basis among higher education institutions and research institutions of all forms of ownership to conduct research in accordance with regional targeted programs; (3) are targeted to higher education institutions on the basis of local and regional commissions for the training of specialists in certain professions for employment in the public sector; (4) are transferred to public higher education institutions established by local authorities to support their development;

• Introduction of state, regional, and local individual grants (vouchers) for higher education;

• Development of crediting with the purpose of obtaining higher education, including at the expense of state, regional, and local budgets;

• Encouraging higher education institutions to raise off-budget funds, including investment funds, to finance higher education institutions;

• Changing the principle of public funding for higher education to be based on ECTS credits rather than years of study;

• Abolition of state-guaranteed bonuses for academic titles and/or academic degrees without any reduction in the total payroll while simultaneously abandoning the Unified Tariff Scale;

• Changes in budget financing procedures establishing the “money follows the student” principle to ensure academic mobility (opportunities for bachelor’s, master’s, and Ph.D. students to acquire part of their credits at other higher education institutions or research institutions of their choice without losing the primary source of funding for their educational program).

2.4.2.2 Institutional changes

Implementation of the proposed changes requires modification of the power vested in central executive authorities and local self-government bodies in terms of

• Planning and execution of budget financing of higher education institutions;

• Separation of the function of financing higher education institutions on the rights of their founder from the function of financing higher education institutions (of all forms of ownership) on the rights of the commissioner of educational and scientific activities within the central executive bodies and local self-government bodies

• Expanding the financial autonomy of higher education institutions, in particular, by granting higher education institutions the right to establish their own system of remuneration for their faculty and other staff and abolishing the requirement for the founder to approve financial plans and reports;

• Enhancing the authority of supervisory boards of higher education institutions over financial and economic activities.

2.4.2.3. Funding

Changing the mechanisms of public funding for higher education institutions does not per se imply a change in the scope of public funding for higher education. Instead, the competitive distribution of these resources among higher education institutions (state, municipal and private) will vary depending on the results of their educational and research activities. 

This area of the reform does not envisage changes in the scope of funding for government agencies that have to develop, adopt and implement relevant legislative changes. At the same time, additional funding, including extra-budgetary funding for organizational and general expenses, will facilitate the development of detailed drafts of the required changes, their negotiation, and approval by all stakeholders.

One of the expected outcomes is the more efficient utilization of budget funds through the diversification of public and extra-budgetary funding mechanisms and the dependence of levels of public funding on the results of the institution's educational, research, and other activities as well as the employability of its graduates. In addition, a gradual increase in extra-budgetary revenues of higher education institutions is expected due to the growing interest of higher education institutions in generating their own revenues, due to better opportunities for efficient use of these funds to support the quality of higher education, research, and innovation.

2.4.3. System of management in higher education at the level of the state, region, and higher education institutions

2.4.3.1. Regulatory and legal framework

Amendments to a number of laws, including the Civil Code, the Laws of Ukraine On Education, On Higher Education, On Scientific and Scientific-Technical Activities are required to implement the proposed institutional changes, in particular with regard to:

1. Revision of the authority of the central executive bodies to manage higher education institutions based on a clear delineation of the functions of state bodies in terms of: 

• Determining the state policy and the basic rules for the functioning of the higher education system; 

• State supervision over compliance with legislation in the field of higher education; 

• State commissioning of specialists training and research in the higher education system; 

• Exercising the powers as a founder of some higher education institutions;

• State supervision over the management of state/municipal property entrusted to a higher education institution for management/use;

• Formation of supervisory boards of public higher education institutions according to the criteria established by law.

2. Enshrining, in accordance with the requirements of the European Higher Education Area, the status of the National Agency for Quality Assurance in Higher Education as a body independent of the Cabinet of Ministers and higher education institutions that provides external quality assurance in higher education

3. Enshrining in the law that all stakeholders are involved in the development and coordination of decisions at all levels of higher education management - students, teachers, researchers, representatives of the administration of educational institutions, employers, representatives of public administration, and local self-government;

4. Revision of the rights of higher education institutions and the powers of its governing bodies (self-government) in view of the change in the status of higher education institutions, in particular: 

• Granting higher education institutions, provided that they meet the criteria established by law, the right to independently confer academic degrees and academic titles; 

• Eliminating excessive regulation of the structure of higher education institutions.

2.4.3.2. Institutional changes

The implementation of the proposed changes requires the abolition or change of the responsibilities of central executive authorities and local self-government bodies in the following areas: 

• Appointing elected heads of state and municipal higher education institutions and concluding contracts with them;

• Defining the role of the Ministry of Education and Science as the core center of the central executive body responsible for ensuring the formation of state policy in the field of higher education and designing state policy with the participation of other central executive bodies;

• Abolition of operational subordination of higher education institutions to the Ministry of Education and Science, with the exception of higher military education institutions and higher education institutions with special education settings;

• Abolition of licensing of educational activities in the field of higher education (except for educational programs that imply obtaining professional qualifications in professions for which laws or international treaties of Ukraine introduce additional regulations, licensing of educational activities in the field of higher education);

• Formation of reputable civil society organizations representing the main stakeholders in higher education – students, teachers, researchers, administrators, and employers;

We suggest that the powers to shape the state policy in the field of higher education should be concentrated in a single body – the Ministry of Education and Science, with other central executive bodies being responsible only for approving decisions on specific issues. Due to the new status of public higher education institutions, the functions of central executive bodies in managing institutions as well as the notion of central executive bodies' sphere of management in the context of managing higher education institutions (except for military higher education institutions and higher education institutions with special education settings) should be eliminated.

It is expected that the governance system of a higher education institution should be based on the balance of powers and the system of checks and balances between the two statutory governing entities, as well as the entities that may be further defined by the institution's charter. 

The two governing entities are guaranteed to be:

• The highest official of the higher education institution (rector, president, head, principal, etc.), who is responsible for the creation and implementation of the institution's strategy and management of daily activities of the administration of the higher education institution

• The main collegial governing body (academic council, academic board, senate, etc.), which is elected from among the academic staff, research and educational staff, as well as students, and is responsible for defining the institution's strategy, its basic policies and addressing strategic issues of educational, research and innovation activities).

We suggest that the enforcement of decisions of the main collegial governing body by the highest official of the higher education institution should be lifted.

At the same time, the law must establish:

• a mandatory list of key issues of educational, scientific, and innovation activities of higher education institutions, the final decisions on which are passed by the main collegial governing body of the higher education institution, including upon submission or approval of the institution's highest official and/or supervisory (trustee) board

• A mandatory list of key issues for the HEI, the final decisions on which are passed by the HEI's highest official, in particular, at the request or upon approval of the main collegial governing body and/or the supervisory (trustee) board;

In military higher education institutions and higher education institutions with special education settings, the responsibilities of governing entities are determined by special laws governing their activities.

In order to exercise certain powers of the founder in higher education institutions (with the exception of those that will remain budgetary institutions in accordance with the Law), the founder establishes a supervisory (trustee) board as a mandatory body, which includes representatives of the founder, employers, and other external stakeholders. The law specifies a mandatory list of key issues related to the activities of higher education institutions, the final decisions on which, with due regard to the framework requirements set by the law, are made by the supervisory board, including at the request of the founder, the HEI's highest official and/or the main collegial governing body, specifically decisions on: 

• Approval of the institution's charter and amendments thereto;

• Appointing an HEI’s highest official elected in accordance with the procedure established by the charter as well as concluding a contract with them; and

• Dismissal of the HEI's highest official (at the request of the main collegial governing body);

• Approval of the financial plan and the financial report of the higher education institution;

• Approval of the system of remuneration of faculty and staff (at the request of the main collegial governing body);

• Supervision of compliance with the charter of the higher education institution by the governing bodies and public self-government.

The founder has the right to delegate other powers to the supervisory board unless the delegation is prohibited by law.

A higher education institution has the right to independently, in accordance with its charter and legislation, resolve other issues of forming a management system, including naming, structure, and powers of management bodies, planning activities, reporting, etc. At the same time, the personal liability of the head of the higher education institution for violation of the law and the charter should be imposed on the basis of an external audit of the institution's activities and/or on the basis of decisions of the court or other bodies authorized by the charter of the institution.

The higher education institution maintains the self-government of employees, students, and young researchers. These internal stakeholders are responsible for the formation and operation of their self-governing bodies, delegation of their representatives to collegial governing bodies, and advisory and working bodies, if provided for by the law and/or the charter of the institution. The law and/or the charter may establish that certain decisions and internal regulations must be approved by the self-governing bodies of the higher education institution.

2.4.3.3 Funding

The restructuring of the higher education governance system at the state, regional, and higher education institution levels does not require special funding.

At the same time, additional funding, including extra-budgetary funding for organizational and other expenses, will expedite the elaboration of detailed projects of the necessary changes, their negotiation and approval by all stakeholders, as well as their implementation.

2.4.4. Quality of higher education

2.4.4.1 Regulatory and legal framework

Amendments to the Laws of Ukraine On Education, On Higher Education, On Scientific and Scientific-Technical Activities are required to ensure the implementation of the proposed institutional changes and changes in funding mechanisms. In addition, these laws should be amended to address the following issues:

• Bringing the requirements for internal and external quality assurance systems of higher education in line with the Standards and Guidelines for Quality Assurance in the European Higher Education Area and other documents of the EHEA, EU, and UNESCO on this issue;

• Creating framework requirements for the availability of procedures for the implementation of educational programs in higher education institutions, which, in particular, should include estimates of labor market needs, availability of necessary personnel and logistical support, compliance with the National Qualifications Framework, and higher education standards;

• Determining the specifics of educational activities in professional higher education programs (professional higher education), in particular:

• The focus of such programs on awarding professional qualifications of the appropriate level;

• The possibility of selecting educational components focused on training for the chosen professional qualification;

• Streamlining the granting of professional qualifications to graduates and students of higher education institutions, including the establishment of additional requirements by higher education institutions;

• Increasing the scope of ECTS for practical training, including through internships, the introduction of a dual form of education, and the possibility of including internships in relevant positions at enterprises, institutions, and organizations as part of the relevant educational programs;

• Acquisition of professional skills defined by the relevant professional standard;

• A separate certification procedure for granting professional qualifications;

• Determining the specifics of educational activities in academic educational programs of higher education aimed at personal development and training of specialists of a wide profile who are able to quickly adapt to changes in society, the labor market, technologies, etc., in particular, by increasing the share of the curriculum that is self-selected by the student;

• Defining the specifics of educational activities under scientific educational programs designed to train specialists for scientific, scientific and educational, educational and innovative activities, in particular, regarding the scientific component of the relevant educational programs;

• Introduction of free remedial courses for certain categories of applicants to higher education institutions (children from low-income and single-parent families, orphans, children with disabilities, children of fallen defenders of Ukraine, etc;)

• Expanding access to individual educational trajectories for higher education students, including through: 

• Self-selection of the pace and form of higher education;

• Empowering students to freely choose educational components, as well as blocks of educational components aimed at obtaining a specific professional qualification; 

• Crediting the results of prior learning of the appropriate level of complexity, as well as the results of internal and external academic mobility;

• Recognizing the results of non-formal and informal learning, including professional experience;

• Defining the legal status of short educational programs that are implemented at a certain level of higher education and envisage the granting of partial qualifications or micro-qualifications, as well as creating opportunities for obtaining a higher education degree by accumulating such qualifications and relevant ECTS credits;

• And so on.

• Defining the specifics of higher education by persons who have previously obtained a corresponding or greater degree of higher education, in particular in terms of admission;

• Defining specifics for the creation and implementation of interdisciplinary educational programs;

• Establishing framework requirements for the procedures and conditions for the recognition of prior learning outcomes and relevant ECTS credits by higher education institutions;

• Establishing framework requirements for higher education institutions to ensure the competence and professional development of faculty, in accordance with the specifics of the educational components they provide;

• Abolishing the licensing of educational activities in the field of higher education (with the exception of educational programs that provide for the acquisition of professional qualifications in professions for which additional regulation is introduced by laws or international treaties of Ukraine);

• Establishing requirements at the legislative level to ensure the formation of key competencies for lifelong learning, as defined by the EU Council, in accordance with the level of higher education and the specifics of the subject area of the educational program;

• Creating an ethical academic environment and ensuring the academic integrity of participants in the educational process.

It is also necessary to:

• Bring the Regulations on the Accreditation of Educational Programs in line with the proposed changes;

• Develop and approve the currently missing regulations on institutional accreditation of higher education institutions and on accreditation of independent institutions for assessing and ensuring the quality of higher education;

• Introduce a list of fields of knowledge that corresponds to the International Standard Classification of Education;

• Significantly strengthen the practical component in educational programs that grant professional qualifications.

2.4.4.2 Institutional changes

Implementation of the proposed changes requires revision of the powers of central executive authorities and local self-government bodies in terms of

• Reviewing the authority of higher education agencies to ensure the quality of higher education in order to eliminate overlaps in functions and/or misinterpretation of their powers by individual agencies

• Ensuring the status of the National Agency for Quality Assurance in Higher Education as an institution that has organizational and operational independence from executive authorities, higher education institutions, and other stakeholders and makes decisions on external quality assurance of higher education independently of them;

• Creation of a network of independent institutions for evaluation and quality assurance of higher education with the support of the state, but without any direct intervention of state bodies and the National Agency for Quality Assurance in Higher Education.

2.4.4.3. Funding

A significant increase in both public and extra-budgetary funding for higher education is needed to ensure the quality and competitiveness of higher education, its ability to contribute to human capital, and the innovation needed for accelerated economic growth through an increase in the share of high-tech products. 

Given the state of Ukraine's economy during the war and the post-war recovery, it is proposed to promote a more rapid increase in real public funding for education and science compared to the GDP growth rate, as well as through the synergistic effect of implementing comprehensive government programs that provide educational and scientific support for Ukraine's recovery projects, the creation of knowledge-based technologies and industries, improving the healthcare system, environmental protection, etc.

Another way to improve public funding is by increasing the efficiency of budgetary funds, in particular through the development of a network of higher education institutions aimed at achieving the highest efficiency in meeting the needs of Ukraine's socio-economic development with a guaranteed level of quality for higher education and its accessibility in all regions of Ukraine.

It is expected that the new status of public higher education institutions will help raise additional extra-budgetary funds through the development of research, innovation, expert, etc. activities, and improve the quality of higher education through greater appeal of Ukrainian higher education to foreign students.

The reform does not envisage changes in the amount of funding for higher education governing bodies. At the same time, additional funding, including extra-budgetary funding for organizational and other expenses, will accelerate the development of detailed projects of the necessary changes, their negotiation, and approval by all stakeholders.

2.4.5. Higher education institutions network and educational environment 

2.4.5.1. Regulatory and legal framework

It is necessary to amend the Laws of Ukraine On Higher Education, On Scientific and Scientific-Technical Activities, the Regulation “On Accreditation of Educational Programs”, and a number of other legislative documents to modify

• The indicators related to the state of the network of public higher education institutions, which should be harmonized with the Eurostat indicators and can be used for decision-making on network optimization

• Inclusion of data on higher education institutions of Ukraine in European databases, in particular, in the European Tertiary Education Register;

• Opportunities to create university alliances, simplify the creation of joint educational programs, and internal academic mobility;

• Recognition of the results of prior learning in higher education programs;  

• Grounds and methods of the founders' actions during the reorganization of higher education institutions;

• Mandatory requirements for material and technical support for educational programs that entail the granting of professional qualifications in professions that require additional regulation;

• Legal framework for rebuilding the network of destroyed and damaged higher education institutions

• Targeted state and regional programs to update the material and technical base of public higher education institutions

• Creating a regime of maximum facilitation for domestic investment and international assistance in rebuilding the network of destroyed and damaged higher education institutions

2.4.5.2. Institutional changes

Following the reform, it is expected that the network of higher education institutions in 2030 will consist of 80-120 public institutions along with a number of private institutions. At this stage, it is proposed that the requirements for different types of higher education institutions should not be formalized, but rather be based on natural differentiation, which will be based on the ability of the institution to meet the requirements and criteria for obtaining public funding for educational and research activities. 

Any decisions on the reorganization of higher education institutions should be passed by the founders solely on the basis of the relevant proposals of these higher education institutions, and upon the acquisition of the status of a public institution, they should be passed by the supervisory (trustee) board pursuant to the proposal of the main collegial governing body of the higher education institution.

State authorities and local governments can facilitate optimal decision-making by offering financial incentives for mergers (consolidations) of higher education institutions, clarifying legal requirements for the conduct of educational activities of higher education institutions, abolishing inefficient regulation, facilitating the creation of joint educational programs, university alliances, centers for the collective use of equipment, etc. One should also bear in mind that, based on international experience, the optimal network of higher education institutions may include both giant universities with several hundred thousand students and small universities with only a few dozen students.

It is expected that by 2030, several university alliances will be established in Ukraine by the decisions of the relevant higher education institutions, involving higher education institutions of the EU countries, which will allow universities to combine their own resources and make joint decisions to increase competitiveness and achieve better results in educational, research and innovation activities without losing their independence. Moreover, we assume that the expansion of the practice of creating university alliances and joint educational programs, and the development of internal academic mobility will promote the efficiency of higher education institutions and the higher education network and can be considered one of the tools for optimizing the network.

2.4.5.3. Funding

Reforming the network of higher education institutions and creating a modern educational environment require a significant increase in both public and extra-budgetary funding for higher education. Therefore, decisions on optimizing the network and upgrading infrastructure should be made based on calculations of both projected costs and estimated positive results, particularly through the indirect impact of improving the quality of higher education on GDP and other indicators of Ukraine's socioeconomic development.

Given the state of Ukraine's economy during the war and post-war recovery, it is recommended that the real volume of public funding for education and science should outpace the GDP growth rate, in particular through the synergistic effect of implementing comprehensive government programs that provide educational and scientific support for Ukraine's recovery projects, the creation of knowledge-based technologies and industries, improvement of the healthcare system, environmental protection, etc.

It is expected that the new status of public HEIs will help attract additional extra-budgetary funding through the expansion of research, innovation, expert work, and other activities, and improve the overall quality of higher education through a greater appeal of Ukrainian higher education to foreign students.

The reform does not envisage changes in the amount of funding for higher education governing bodies. At the same time, additional funding, including extra-budgetary funding for organizational and other expenses, will accelerate the development of detailed projects of the necessary changes, their negotiation, and approval by all stakeholders.

2.4.6. Communication of reforms to society

The Verkhovna Rada of Ukraine, higher education authorities, founders, and higher education institutions should implement the decisions.

The greatest opponents of the reform may include:

• Government officials and public authorities - due to the reduction of the powers of the relevant bodies in charge of managing higher education institutions, as well as the necessity to introduce new procedures for planning and implementing budget financing of higher education institutions, which will entail the need for additional training of employees. This can be mitigated, in particular, by shifting the focus of their activities towards the development of state and regional policies in the field of higher education, analytical, and forecasting activities. Today, such functions are mandated, yet due to the lack of human and material resources, they are not fully implemented. Another tool is additional extra-budgetary funding for the organization of relevant training.

• Employees of the Ministry of Finance and the State Tax Service - in view of the need to change the attitude toward higher education as a state-supported sector to view it as a sector that creates human and social capital, knowledge, and innovation necessary to accelerate socio-economic development. This can be addressed through appropriate training.

• Representatives of the administration of state and municipal higher education institutions - due to increased financial risks as a result of growing institutional autonomy. This can be addressed through a balanced growth of opportunities offered by financial autonomy, as well as training of administration representatives, including employees of financial departments of higher education institutions;

• Employees of higher education institutions - due to departures from the usual distribution of responsibilities and an increase in the powers of the institution's governing bodies. This can be partially overcome by ensuring transparency of the operations of all governing and self-governing bodies of the institution and its structural units. It is also assumed that the change in status and the expansion of the institution's autonomy should take place concurrently with a reform of the higher education institution management system, which should balance the powers and responsibilities of the HEI's highest officials with the powers and responsibilities of collegial governing and self-governing bodies, as well as engage all stakeholders, including employees and students, in decision-making.

• Employees of higher education institutions that are undergoing reorganization, due to the failure of these institutions to operate successfully in a competitive environment in the status of a public HEI. The challenges can be overcome through attractive offers to such institutions and/or their employees. This may include, in particular, the creation of strong institutions by merging or joining, shifting the core activities into the field of adult education, establishing powerful centers of professional higher or vocational education on the basis of institutions that are being liquidated, employment of workers in the field of non-formal education, etc.

The main supporters of the proposed reform package are likely to be

• Parents;

• Applicants/students;

• Graduates;

• Employers;

• Progressive research and academic staff of higher education institutions.

Another major challenge may arise from the need to reshape the mindset of both higher education authorities and higher education institutions. This is due to the fact that the reform inherently implies a significant transformation of the owner/property relationship between governing bodies and higher education institutions into a partnership for the development of the higher education system and the state as a whole. Therefore, a period of transition should be determined for a gradual change in the status of higher education institutions that meet the established criteria, with the possibility of implementing relevant pilot projects.

2.4.7. Steps/stages of change

The main steps of the proposed changes may include

• Approval of the concept of a “public institution” with all stakeholders (professional communities, experts, civil society organizations, and governing bodies in the field of education, medicine, culture, sports, central executive authorities in the field of finance, economic development, anti-corruption policy, etc., MPs, experts in the field of civil and commercial law) - 2024

• Approval of the updated concept of “higher education institution” (range of economic activities, scope of rights and powers, management structure) with all stakeholders - 2024;

• Agreeing on the concepts of new models for financing higher education, management in higher education, ensuring the quality of higher education, and establishing a network of higher education institutions - 2024;

• Reflecting the updated system of higher education financing within the state, regional and local budgets - 2026-2030.

• Introducing a package of necessary amendments to the laws of Ukraine and their adoption by the Verkhovna Rada of Ukraine - 2024/2025

• Development and approval of the necessary regulatory documents by the CMU and central executive bodies - 2024/2026;

• Implementation of new norms in the constituent and internal documents of higher education institutions - 2025/2030;

• Evaluation of preliminary results of the reform and introduction of necessary amendments to the legislation - 2026/2030.

2.4.8. Criteria for assessing the success/failure of the reform

• The criteria for assessing the success/failure of the reform may include

• The level of provision of needs of Ukraine, its regions, and communities for specialists with relevant qualifications by the network of higher education institutions according to surveys of employers and heads of state and local authorities;

• The level of coverage of citizens' needs for higher education by the network of higher education institutions (according to the results of opinion polls);

• The level of coverage of the needs for additional qualifications, including higher levels of the NQF, by the network of higher education institutions for persons demobilized from the Armed Forces of Ukraine and/or in need of retraining due to the consequences of the war;

• Increased competitiveness of Ukrainian higher education institutions, which can be assessed, in particular, by increasing their positions in world educational and scientific rankings, increasing the number of foreign students in Ukraine;

• Growth in performance indicators and better results of educational, scientific, innovative, and international activities of higher education institutions;

• Better financial results of educational, scientific, innovative, and international activities of higher education institutions due to the extension of financial autonomy and enhanced opportunities to attract funding; higher revenues of higher education institutions;

• Reduction in the number of those educational programs offered by higher education institutions that enroll an unreasonably low number of students;

• Improvement in the quality of higher education in Ukraine according to opinion polls;

• Higher level of academic mobility of participants in the educational process and, as a result, improved quality of higher education;

• Enhanced influence of higher education institutions on the socio-economic development of Ukraine, its regions. and communities;

• Increase in the perceived responsibility of employees of higher education institutions for the prosperity of the institution and higher involvement in the management of the institution through collegial governing bodies (self-government) according to surveys of employees of higher education institutions;

• Intensification of participation of higher education institutions of Ukraine in the activities of international and European organizations in the field of higher education and in international educational and scientific cooperation, raising their influence on decision-making on the development of education, science, and innovation in the EHEA and the EU;

• Completion of the digitalization of all data collection tools for higher education.

• 
  

• Abandoning the reforms necessary for the development of higher education because they are unpopular among the beneficiaries of the unreformed higher education system.

• Taking steps to reform higher education that are not coordinated with each other and/or contradict the overall strategy for the development of higher education.

• Reducing the requirements for applicants and graduates compared to the requirements of the National and European Qualifications Framework.

• Tolerating any form of academic dishonesty.

• Reducing the cost of education compared to the minimum necessary costs for quality education.

• Violation of the equality of rights of higher education institutions in conducting educational, scientific, and innovative activities, depending on their legal status.

• Centralized determination of the level of remuneration for employees of the education system depending on their formal status (“seniority”, academic degree, and/or academic title), with no regard to their performance.

3. 3. SCIENCE AND INNOVATION POLICY

1. 3.1. STATE OF AFFAIRS IN THE FIELD OF SCIENCE AND INNOVATION AS OF EARLY 2023

Science and technology in Ukraine face systemic challenges, most of which have existed long before the full-scale Russian invasion. The war has exacerbated these challenges and created new ones, such as a significant cut in funding, the devastation of the research base, and the outflow of scientists. 

3.1.1 General state policy issues in the field of research and innovation:

The absence of a coherent state strategy for the development of science and innovation is a fundamental problem. As a result, there is virtually no continuity of state policy in this area nor any coherence with the development strategies of other socially important areas. Science is regarded as a cultural heritage rather than as a driving part of socio-economic development; very limited resources are allocated for the development of science and innovation, which are considered to be maintenance costs rather than investments. As a result, science has little capacity to address specific problems of the economy and society. Another consequence of this policy is the proliferation of simulated research and innovation, which is one of the factors behind the spread of pseudoscience and violations of academic integrity. The state does not define specific tasks for science and innovation, and hardly ever uses the results of scientific research in the development and implementation of policies. The legislation does not provide effective incentives to invest in research and development, and state support for innovation is insignificant.

3.1.2 Problems of governance and policy-making in the field of research and innovation:

The legislative framework is generally outdated and contradictory and suffers from chaotic and unsystematic changes. Its systemic updating is hampered by numerous compromises aimed at solving immediate problems, a lack of resources, and the absence of a strategic vision and effective coordination of actions between different ministries. The functions of ensuring the formation and implementation of the state policy in the fields of science and innovation are not clearly divided between the Ministry of Education and Science, other central executive bodies, national academies of sciences, and the National Research Foundation. The status of the National Academy of Sciences of Ukraine and other national academies of sciences, which are both self-governing organizations and governing bodies in the field of higher education and science, is intrinsically contradictory.

The Ministry of Education and Science, which is primarily responsible for policy development, lacks the qualified staff it needs to perform its duties. Decision-making, data collection, and data processing procedures are imperfect and poorly digitalized. This limits the ability of the MES to formulate policy objectives, develop policy, and evaluate its impact. 

The system for managing research and innovation activities is a remnant of the Soviet era and does not correspond to modern realities. Large research institutes, which in the Soviet system performed tasks within the framework of government programs, tend to pursue inertia research in historically accepted but at times outdated areas due to lack of external commissioning. The quality of research groups within a single research institution can vary greatly, with competitive research groups receiving little or no advantage. The distribution of funding among research institutions by the central agencies responsible for budget allocation is non-transparent and generally not based on productivity and achievements; there are no transparent accountability tools; research performance is evaluated on the basis of irrelevant formal indicators that are easy to measure but fail to reflect the actual significance of scientific results. 

The system of the so-called “sectoral science” (almost every ministry operates research institutions or units under its jurisdiction) is outdated and irrelevant, and cannot deliver quality research and innovation. 

3.1.3 Challenges in the area of science-economy linkages

The low-tech structure of the economy (which resulted from a significant reduction in knowledge-based production as a result of the economic crisis of the 1990s) limits the need for R&D. The lack of systematic communication between the research sector and the industry leads to a low level of mutual trust and cooperation. Instead of requesting scientific products, businesses prefer to purchase off-the-shelf solutions abroad. This is also due to the high risks associated with long-term investments caused by the unstable economy and political volatility. As a result, private sector funding for R&D is generally scarce. Research laboratories, which used to serve as a link between production and research institutions, have virtually disappeared in enterprises. Legal and financial restrictions imposed by the status of a budgetary institution (which almost all scientific organizations hold) make cooperation with scientific institutions burdensome for private partners. The share of applied research (including defense and security-related research) is disproportionately low, as it requires significant resources that the state does not provide.

3.1.4 Problems with financing instruments

Fundamental, applied, commercialize, defense-related, and security-related research all require very different financial instruments and management models. Existing financing instruments are not adapted to these needs. 

There are no effective and transparent procedures for incentivizing quality research. The system of state certification of research institutions and higher education institutions does not provide an adequate assessment of scientific research, and the results of certification do not actually affect the level of funding. Instead, the “traditional” institutional funding is maintained, and individual salaries of researchers are calculated based on degrees and titles rather than on real scientific achievements. 

Given the constraints of limited funding for science, most of that funding remains essentially basic. The share of funding on a competitive basis is low, and departmental competitions (NASU, MES, ...) are in fact a substitute for institutional funding. Only a small part of the state funding for research is spent on research facilities (equipment, materials, etc.), while the larger part is spent on salaries and utilities. Over the past 5 years, several new independent grant-giving institutions have emerged (National Research Foundation of Ukraine, Ukrainian Startup Fund, Presidential Foundation for Support of Education, Science, and Sports), but the amount of funding allocated through these new instruments is insignificant and their institutional capacity is not sufficient to provide a full range of funding opportunities for different types of research. 

3.1.5 Problems with human capital 

Due to the departure of some leading scientists from Ukraine in 1991-2022, the aging of others, and the declining appeal of a scientific career for young people, the quality of human capital in the field of science and innovation has gradually deteriorated over the years. The existing incentives in scientific careers are grounded in misplaced priorities (fulfillment of formal requirements for obtaining titles and degrees, dependence of the level of remuneration on the formal presentation of a title and a degree, rather than on actual work results). This encourages the imitation of science and violations of academic integrity, which have become a systemic and widespread phenomenon in some fields. The scientific community demonstrates poor self-organization and is unable to maintain high standards of research and academic integrity under these misdirected incentives.

Low salaries for researchers make the scientific profession unattractive for young people, leading to a steady decline in the total number of scientists and the share of young scientists.  Researchers are too dependent on the administration, as they have limited opportunities to receive external funding and limited mobility. Low mobility within Ukraine and across borders makes the Ukrainian academic labor market very localized and fragmented. The spectrum of career tracks for academics is very narrow, creating a typical phenomenon of building a research/teaching career at a single institution from graduate school until retirement.

The higher education system has similar problems and does not fulfill any function of selection, therefore losing its ability to train researchers at an adequate, globally competitive level. The connection between higher education and research and innovation is weak, and there are no government programs that would facilitate cooperation between research institutions and universities.

3.1.6 Problems of the research infrastructure

An important adverse factor is the limited access to modern scientific equipment and leading scientific journals and publications. The outdated and insufficient research infrastructure ( ranging from buildings to equipment) in scientific institutions demands significant investment in modernization. Neither detailed data on the state of the existing research infrastructure, nor a strategy for infrastructure development that would be aligned with the overall strategy and backed by the necessary resources, nor mechanisms for the collective use and management of research infrastructure exist.  

3.1.7 Problems of integration into the global research environment

There is no national strategy for the internationalization of the Ukrainian research and innovation sector that would envisage a systematic effort to attract foreign partners at all levels (research institutions, higher education institutions, research foundations, and scientific publications), including through using the potential of the Ukrainian scientific diaspora. The Roadmap for Ukraine's Integration into the European Research Area approved only at the level of a ministerial decree, has already grown outdated, and there are no resources available for its implementation.

Due to the low level of proficiency in English and other foreign languages, most Ukrainian researchers have limited opportunities to acquire and share knowledge and scientific methods, and many research areas are disconnected from the global scientific process, thus being of poor quality and unlikely to be of interest to international partners.

Incompatibility of the legal framework, as well as bureaucratic and financial constraints, alienate international partners and demotivate Ukrainian research institutions from fostering international cooperation at the institutional level. In addition, the country lacks resources to conduct research using foreign research infrastructure.

2. 3.2. VISION OF THE SCIENCE AND INNOVATION POLICY IN THE PERSPECTIVE OF 2030, INCLUDING MEASUREMENT INDICATORS 

3.2.1 The role of science and innovation in society

Ukraine enjoys a knowledge economy and a knowledge society, in which knowledge is created, shared, and used to drive its economic development, personal development, and well-being of its citizens, and to solve societal problems. All components of the knowledge economy are sustainably supported by rapid economic growth. The education system tolerates mistakes as an element of creative search, encourages the search for innovative solutions, and teaches systematic thinking. 

Ukraine's economic development, defense capability, and national security rely on modern technologies, a significant part of which is based on Ukrainian research and innovations created by Ukrainian scientists and engineers both independently and in joint projects/enterprises with European and other foreign partners.

Ukrainian society uses knowledge, technologies, and tools created in Ukraine and around the world to attain prosperity, a decent standard of living, and development. Pseudoscientific activities, products, and services have been marginalized and largely pushed out of the market. Violations of academic integrity, professional ethics, and research standards are not tolerated in education and science at any level of education, in any public office, or society as a whole.

The level of public trust in science has increased significantly. Scientific expertise is systematically used to design policies, as well as in decision-making in public administration, local government, business, and public activities. As a result, an analytical capacity to make forecasts, conduct foresight studies, and create long-term development strategies is emerging. Advisory bodies have been established and are effectively functioning under the state authorities, with a wide range of scientists constantly involved in their work. The state priorities for scientific, technological, and innovation activities reflect the real needs of the state and society. Highly educated scientists, engineers, and technologists have the opportunity to fulfill their professional potential in Ukraine. 

The knowledge intensity of GDP has increased to 2% of GDP, with a significant share comprised of funds from Ukrainian and foreign businesses, as well as funds from foreign donors aimed at the post-war reconstruction of Ukraine.   Ukraine has risen from the Emerging Innovator to the Moderate Innovator position on the European Innovation Scoreboard.

3.2.2 Public administration in the field of science

State policy in the field of science and innovation is formed by collecting and analyzing relevant and reliable data and modeling the consequences, with the involvement of scientists, experts, and the study of international experience. The public administration system structurally separates the functions of policy development and implementation. Specialized institutions provide support for government policies. Cross-sectoral coordination at the national and regional levels ensures effective decision-making and consistency in support tools.

Digitalization of all data collection tools in the field of science and innovation minimizes the time consumption of researchers, analysts, and policymakers, and simplifies access to relevant information for businesses and citizens. The National Electronic Scientific Information System contains data on the research infrastructure, relevant institutions, and the results of scientific and technical activities of scientists necessary for making informed decisions, as well as greatly simplifies and automates the generation of relevant reports.

3.2.3 Scientific institutions and research infrastructure

The system of national academies of sciences has undergone a gradual transformation. Two scientific societies were created on the basis of a voluntary consolidation of scientific institutions that successfully passed the initial evaluation procedure, with one uniting scientific institutions that conduct mainly fundamental research and the other one conducting applied research. These societies are not state agencies exercising the management of science but they can perform the functions of the chief administrators of budget funds, as well as other functions delegated to them by scientific institutions.

The scientific institutions of the national academies of sciences and their specific subdivisions that meet the established criteria were identified through an assessment conducted with the wide involvement of leading foreign experts. For scientific institutions that are not part of scientific societies, following the recommendations of the assessment, the government decides on their liquidation or reorganization. Such scientific institutions may continue to operate outside these societies as scientific institutions, provided that they meet the criteria for scientific institutions (in particular, as legal entities of private law), continue to operate as another type of legal entity (enterprise, think tank, etc.), or become part of another legal entity (higher education institution, enterprise, etc.) with the loss of legal entity status. A similar approach was applied to the reorganization of state research institutions that are managed by public authorities and perform analytical support functions.

The legislation has updated the status of a scientific institution as a separate type of legal entity of public and private law with broad institutional (academic, financial, organizational and personnel) autonomy, the right to be the owner and manager of its property, the right to budgetary funding of scientific activities on a competitive basis, a single taxation regime, land use, the right to receive state and/or municipal property for use and/or economic management for scientific activities, the right to independently dispose of all assets and liabilities, and the right to conduct research (except in cases specified by the legislation on certain types of revenues /such as state/regional contracts, targeted programs, etc./ and/or agreements concluded by it). The updated legal status of a research institution allows it to determine its system of remuneration for employees, in particular, the level of remuneration for researchers at the expense of the competitive component of budget funding and extra-budgetary funds. The system of management of a scientific institution, the election of its head, and the formation of collegial governing bodies ensures the effective use of the opportunities offered by this status. The rights of individual research teams within scientific institutions (laboratories, groups, departments, etc.) have been significantly expanded, in particular in terms of receiving and managing grants and funds from commissioners of specific scientific and research projects.

The national academies of sciences have lost the status of state organizations and governing bodies in their respective fields but may continue to exist as public associations of scientists (professional scientific societies) upon the decision of their general assemblies.

The development of the national research infrastructure follows a strategy based on national priorities and regional development strategies, taking into account the possibilities of joint use of infrastructure resources of Ukraine and the EU, as well as other international partners. At the national level, shared access to research infrastructure, data reuse, and other Open Science principles have been introduced. The e-infrastructure is being further developed in line with the relevant strategy and ensures effective interaction with partner countries.

3.2.4 Funding and evaluation of research activities 

The funding of research activities from the State Budget is a multi-channel system and consists of:

• Institutional basic funding, which is distributed by state founders between research institutions and higher education institutions established as legal entities of public law, based on the evaluation of the results of their research and/or innovation activities;

• Competitive funding (institutional, project, and individual) through the National Research Foundation and other specialized foundations;

• Competitive funding under state targeted programs, including projects within such programs; 

• State commissioning for research and development, which is allocated through a specialized agency;

• Co-financing programs for research projects with business and foreign partners.

Research activities funded from the state budget, except for basic funding, are usually financed on a competitive basis.

The National Research Foundation (NRF) is a powerful institution with a wide range of programs for the competitive support of individual researchers, research groups and organizations (key laboratories, clusters of advanced science), science popularizers, and the involvement of students and pupils in scientific and technical activities. State funding of the NRF amounts to at least 20% of all state budget funds allocated for research and development (excluding the security and defense sector). In addition to the NRF, specialized (including non-governmental) foundations are also actively operating to support the commercialization of scientific research, provide individual support to talented young people (in particular, scholarships for studying in higher education institutions), etc.

The system for evaluating scientific performance is based on independent expertise and the use of digital tools, is separated from policy-making bodies, and relies on reliable data that can be independently verified. The evaluation of research institutions also includes a separate evaluation of all their research units. Based on the evaluation results, the authorized body may make separate decisions on the reorganization or liquidation of the institution or its specific units. 

Automatic bonuses for academic degrees and academic titles have been eliminated, and researchers’ salaries are now competitive in the labor market. State authorities do not make decisions on the awarding of academic degrees and academic titles and do not define substantive criteria for making such decisions, but instead oversee the transparency and compliance with the procedures prescribed by the law. The scientific community develops criteria for evaluating scientific performance, in particular by providing relevant recommendations from reputable professional scientific societies.

Effective incentives are in place to encourage researchers' integrity and gradually marginalize pseudoscientists and imitators. Academic integrity and credibility are recognized values that are upheld by several instruments (in particular, the disclosure of proven information on cases of academic misconduct, incorporation of reputational indicators into the criteria for competitions for funding research and innovation projects, etc.)

3.2.5 International cooperation 

Ukrainian science is integrated into the European and global scientific space and is competitive worldwide. Ukraine is involved in the design and implementation of European policies in the field of science and innovation. Brain circulation is underway, i.e., the outflow of human capital from Ukraine is beginning to be balanced by the inflow of Ukrainian and foreign researchers from abroad. Ukraine stands out as an attractive place to work in the global research and innovation market. The Ukrainian scientific diaspora is actively involved in cooperation with Ukrainian researchers, scientific institutions, and higher education institutions, as well as in the evaluation of policies and the results of research and innovation activities in Ukraine. Active engagement with researchers and research organizations from other developed countries is the norm for all scientific fields. The results of research conducted in Ukraine and the Ukrainian innovations are known and applied in the leading countries of the world.

3.2.6 State policy in the field of innovation

All components of the innovation ecosystem operate in a coordinated manner and mutually reinforce each other. The government is capable of shaping an ambitious vision and ensures the implementation of policies aimed at promoting world-class innovation, especially concerning to the country’s priority technology areas, including national security, aerospace, cybersecurity, healthcare, etc.

The system of state support for innovation, which offers a wide range of financing instruments and incentives for researchers, innovators, and businesses, cultivates a philosophy of creative search and risk-bearing in favor of a potential impact.

The coordination of state innovation policy is carried out at the government level, which enables flexible coordination of actions and instruments. To monitor the quality of the implemented policies, innovators and businesses are involved as regular consultants to the government. Due to other systemic transformations, such as the improved business climate and the rule of law, the vast majority of Ukrainian startups choose Ukraine as their country of registration. Ukrainians are among the top 10 countries where citizens are founders of unicorn companies. Foreign companies run their R&D structures in Ukraine, where they conduct advanced research and development. In terms of investment climate for high-tech investments, Ukraine is a leader in Central and Eastern Europe.

3.3 KEY ISSUES TO BE SOLVED TO ACHIEVE THE DESIRED OUTCOMES IN THE FIELD OF SCIENCE AND INNOVATION

• Formulate a unified state strategy for the development of science and innovation, consistent with the development strategies of other areas of economic and social growth. Ensure the proper functioning of the National Council of Ukraine for Science and Technology Development and dynamic coordination of innovation policies. 

• Separate the functions of policy formulation and implementation in the field of science and technology:

• Policy formulation (Ministry of Education and Science, National Council of Ukraine for Science and Technology Development); 

• Analytical and advisory support for policy formulation (specialized institutions provide forecasts, scenarios, and foresight studies)

• Implementation of policies: 

• The National Research Foundation allocates funding for research and development on a competitive basis; 

• Specialized institutions ensure the transparent evaluation of scientific activities, collection of reliable data, popularization of knowledge, scientific and innovative activities, etc.; 

• scientific institutions, higher education institutions, and knowledge-intensive enterprises create, share, and use knowledge and innovations to promote the development of the economy and society.

• Ensure the real influence of advisory scientific and expert bodies on decision-making regarding the development and improvement of policies. The composition of these bodies should be determined on a competitive basis.

• Re-launch the National Council for Innovation Development as a platform for interagency policy coordination and communication with innovation ecosystem players.

• Revise the National Strategy for Innovative Development to include specific financing instruments and incentives, and provide sufficient resources for its implementation.

• Provide a legal framework and the necessary tools to transform the NASU and other national academies into scientific societies that are financed by scientific institutions and represent the common interests of these institutions. Strengthen the legal status of scientific institutions, expanding the rights of this type of legal entity and defining the balance of powers between the head of a scientific institution and its collegial governing bodies.

• Create a system of financial mechanisms for multi-channel public funding of science, as described above.

• Create a separate state agency to finance strategically important research and development (in the areas of defense, security, etc.). This agency should be comprised of specialists with research experience and specialists with experience of work for government contractors.

• Grant researchers (heads of research teams) who have received targeted (grant) funding for their projects the right to independently manage the funds received using the infrastructure of their institution (their organization) pursuant to a trilateral grant agreement on the terms and conditions of the grantor's funding. Provide grantees with the right to change the research institution/university in which the grant will be utilized. 

• Create a supportive legal framework to encourage cooperation between research institutions, higher education institutions, and businesses, as well as provide incentives and conditions for researchers to enter the field of innovation, and businesses to engage in R&D, as well as for collective production of knowledge and innovation. Develop a system of incentives to attract business investment in research and innovation.

• Ensure the protection of intellectual property rights. Create tools of financial support for patenting, including international patenting.

• Create supportive legal and tax environments to encourage “scientific outsourcing” to enable foreign companies and research organizations to conduct research in Ukraine.

• Create tools to support and foster the scientific community, in particular, introduce grant support for the establishment and operation of professional scientific societies and other associations of researchers.

• Specify that scientific institutions and higher education institutions that meet the legally mandated requirements have the right to make the final decision on awarding academic degrees and academic titles.

• Create a national electronic scientific and information system for collecting and analyzing data in the fields of science, technology, and innovation. Fully digitize the collection and processing of information necessary for the design and implementation of science and innovation policies, as well as for the evaluation of scientific activities. Update the system of evaluation for scientific activities of research institutions and higher education institutions based on prior experience of state certification, international best practices, and the implementation of electronic tools.

• Create a legal framework that would facilitate and promote international scientific cooperation of all forms.

• Create a legal framework for the formation of clusters of advanced science with international funding. 

• Update and implement the Roadmap for Ukraine's Integration into the European Research Area as a cross-sectoral government policy backed by adequate funding. 

• Ensure institutional support for Ukrainian researchers, innovators, businesses, and civil society organizations to participate in the EU's Horizon Europe framework program and other instruments supporting research and innovation. Institutionally structure and support the work for international cooperation in the field of science. Launch programs to attract researchers from the international academic market, support cooperation with the diaspora, etc.

• Secure long-term concessional (preferably non-refundable) international funding for the development of research infrastructure in the amount of at least $1 billion.

• Establish end-to-end state systems for selecting and supporting scientific talent and innovators from high school up to post-graduate studies.

• Incorporate the requirements for forming of key competencies for lifelong learning recommended by the EU Council into education standards and educational curricula.

• Create conditions for the training of communication specialists who could ensure knowledge transfer and interaction between scientists, businesses, the state, and society. Include the development of communication skills in researchers' training programs, in particular the ability to present research results to representatives of various stakeholder groups in Ukrainian and English.

• Encourage the creation of educational programs in the system of lifelong learning aimed at teaching cooperation between science and business, commercialization of research, and launching knowledge-intensive startups.

Identification of the issue/group of problems

Issue 1: The legal status of scientific institutions, units, and teams hinders their development and competitiveness.

Today, most scientific institutions hold the status of budgetary institutions managed by the National Academy of Sciences of Ukraine, sectoral national academies of sciences, and central executive agencies. This status is specific to the transitional post-Soviet period and fails to address the current challenges posed by the scientific sector and EU integration. It imposes significant restrictions on the institutional autonomy of scientific institutions as well as the academic freedom of scientific units and teams, as enshrined in the documents of the European Research Area and the Law of Ukraine On Scientific and Scientific-Technical Activities, as well as other laws of Ukraine. This essentially discourages both scientific institutions (research units, research teams) and their partners from cooperating, enhancing the efficiency and quality of research, and attracting extra-budgetary resources to scientific institutions. 

Issue 2. Inefficient system of management in the field of science and innovation

The existing system of management of scientific and innovation activities preserves the characteristic features of the Soviet era and does not correspond to the current stage of society's development, nor does it contribute to the development of science and innovation, ensuring the quality and competitiveness of research and development. The system of national academies of sciences functions as a string of multidisciplinary self-governing ministries of science, which complicates the formation of a unified state policy in the field of science and innovation. The system of management of sectoral science is outdated and irrelevant. Governance within scientific institutions is overly centralized and based on the Soviet principle of “one-man rule”. Instead, the capability of scientific units, teams, and scientists to influence decision-making, particularly on issues regarding organization and the efficiency and quality of research, is insufficient.

Issue 3. The system of funding science and innovation is not designed to promote the high quality and competitiveness of research and development

The system of funding science and innovation does not promote efficient use of available funds. Much of the budget funding is used to maintain institutions, departments, and teams that do not have the potential to conduct quality research and create relevant innovations. The existing legal framework does not facilitate the acquisition of extra-budgetary funds by research institutions and may even impede such fundraising. The scope of funding does not cover the minimum required to maintain the quality and competitiveness of research and innovation. 

Issue 4. Poor quality of research and innovation

At present, a significant part of the results of scientific research, scientific journals, publications, and dissertations bears little to no scientific value, and much of the technology that is deemed innovative is in fact neither innovative nor competitive on the relevant markets. Inadequate goals, indicators, and criteria within the management and funding system encourage imitation of research and innovation, pseudoscience, and violations of academic integrity and research standards by a significant number of scientists. The scientific community is poorly organized and unable to address these issues. Ukrainian science is insufficiently integrated into the European Research Area, both in terms of engagement and the current legal framework.

Issue 5. The network of scientific institutions does not maintain their efficiency or effective interaction, and its infrastructure does not support the quality of research and development

Disruption of links between research institutions, higher education institutions, and other organizations conducting applied research and businesses, enterprises, and organizations that should be consumers of their research results and proposed innovations. Much of the research and innovation is conducted without regard to similar research conducted in other countries or institutions, without using the accumulated knowledge about the relevant issues, and without applying modern tools and techniques.

3.4.1 Legal status of scientific institutions

3.4.1.1. Regulatory and legal framework

Amendments are needed to the Civil, Budget, Tax, Land Codes, the Law of Ukraine On Scientific and Scientific-Technical Activities, and the Law of Ukraine On Higher Education, as well as a number of other laws that would define and ensure the new status of scientific institutions, including the institutional changes mentioned in paragraph 2, and the institutional (academic, financial, organizational, and personnel) autonomy of scientific institutions. Legislative changes are also required in the following respects:

• Defining the types and criteria of specialized activities of scientific institutions, which, aside from the core activities (scientific and scientific-technical), may include, in particular, innovative, cultural, artistic, museum, and library activities, activities focused on the development of Ukraine, its regions and communities, defense of Ukraine, development of physical culture and sports, provision of medical and veterinary services, publishing, etc. depending on the profile of the scientific institution

• The right of public research institutions to independently dispose of the funds received by them (from any source) in accordance with the objectives of the institution and the terms of funding agreements ( intended use of funds, etc.)

• The right of a scientific institution to independently decide on international activities and joint research with foreign institutions (except for institutions and research in the areas of defense and security);

• Equal rights and obligations of public and private research institutions to conduct research, education, and innovation activities;

• Equal rights of public and private scientific institutions to receive budgetary funding for scientific research, which should be conducted on a competitive basis;

• Criteria, legal restrictions on activities, guarantees, and benefits for non-profit scientific institutions of all forms of ownership;

• Removal of penal provisions from the tax legislation, according to which a non-profit institution loses its non-profit status for an indefinite period after any single violation of its income or expenditure regime;

• Equal taxation rules for non-profit scientific institutions of all forms of ownership;

• The right of non-profit scientific institutions (except for budgetary institutions) to establish subsidiary commercial structures for innovative activities independently or in partnership with other enterprises, institutions, and organizations as well as to invest the funds received from their own revenues in their statutory capital;

• Ensuring the ability of scientific institutions of all forms of ownership, including non-profit ones, to engage in other economic activities that should be institutionally or organizationally and financially separated from their core activities;

• The right of scientific institutions to independently determine and change their organizational structure;

• Legislative provision of an exhaustive list of grounds on which the founder has the right to liquidate a scientific institution or reorganize it by way of transformation, merger, division, demerger, or acquisition of one legal entity by another, as well as the procedures for approving corresponding decisions;

• Defining the rights of individual research teams within scientific institutions (laboratories, groups, departments, etc.), in particular in terms of receiving and disposing of grants received by them and funds from commissioners of specific scientific and research projects.

3.4.1.2. Institutional changes

The proposed reform envisages a set of institutional changes in the management of science and innovation and scientific institutions.

In particular, greater institutional autonomy of scientific institutions requires a limitation of the respective powers of the state administration bodies in the field of science and innovation, with a partial transfer of these functions to the supervisory boards of scientific institutions, as explained in more detail in Section 2. Instead, the functions of state administration bodies should be expanded to include evidence-based policy-making, analytical support, forecasting, coordination with other areas of public administration, etc.

Implementation of the proposed changes requires changes in the mandate of central executive authorities and local self-government bodies in terms of:

• Procedures for appointing and dismissing heads of scientific institutions and higher education institutions;

• Approval of budget estimates and staff lists of scientific institutions;

• Determining the conditions for the use of budget funds distributed on a competitive basis;

• Performing the functions of authorized bodies for the management of state property entrusted to the management/disposal of scientific institutions, etc.

It is also necessary to amend the bylaws regulating the activities of governing bodies in the field of science to reflect the proposed changes in their functions. In particular, this should concern the MESU's assessment of the effectiveness of the use of the institutional autonomy granted and the incorporation of the collected data into the development of public policy.

As for scientific institutions, we propose such measures:

• Introducing an updated status of a “scientific institution” as a separate type of legal entity of public and private law with broad institutional (academic, financial, organizational, and personnel) autonomy and entitlement to budgetary funding of scientific activities on a competitive basis;

• A reclassification of state and municipal scientific institutions (with the exception of scientific institutions that fall under the jurisdiction of state bodies in the field of national security and defense) from the status of a budgetary institution to the status of a public institution - a non-profit scientific institution of public law founded by state bodies or local self-government bodies with the purpose of conducting scientific and/or technical activities, which:

• Manages the state or municipal property granted to it by virtue of operational management or full economic management;

• Is the legal owner of the property acquired at the expense of its own revenues;

• Independently manages its own revenues in accordance with its constituent document;

• Introducing a unified taxation regime and regulation of land use for non-profit scientific institutions of public and private law;

• Establishing clear and reasonable criteria for the status of a scientific institution.

Changes in the legal status of scientific institutions entail a number of other changes in the governance of science and innovation, which are detailed in the next subsection of this section.

3.4.1.3. Funding

The change in the legal status of scientific institutions does not require any additional funding. Nevertheless, such change constitutes only one component of comprehensive change within the governance system, the thorough and detailed design of which is quite labor-intensive and can be accelerated with additional funding.

3.4.2. System of management in the field of science and innovation

3.4.2.1. Regulatory and legal framework

In order to implement the proposed institutional changes, it is necessary to amend a number of laws that regulate the system of governance in the field of science and innovation. In particular, amendments are needed to the Civil, Budget, Tax, and Land Codes, the Law of Ukraine On Scientific and Scientific-Technical Activities, the Law of Ukraine On the Features of the Legal Regime of Activities of the National Academy of Sciences of Ukraine, National Branch Academies of Sciences and the Status of Their Property Complex, and a number of other regulatory acts concerning:

• Transformation of the National Academy of Sciences of Ukraine and national branch academies of sciences into civil society organizations or voluntary scientific societies (voluntary associations of scientific institutions) that do not perform functions of implementing state policy and do not have the status of budget funds managers

• Revision of the distribution of powers between the authorities that manage science and innovation in order to separate the functions of formulating state policy from the functions of implementing this policy;

• Reviewing the powers of the head and collegial governing bodies (self-government) of a scientific institution in view of expanding the academic and financial autonomy of scientific institutions, in particular, by eliminating excessive regulation over the structure of a scientific institution, the structure, powers, and procedure for appointing its governing bodies.

Specifically,

• The Ministry of Education and Science should be vested with the functions of formulating state policy in the field of science and innovation, including the elaboration (in cooperation with other central executive bodies) of the subjects of state targeted scientific and technical programs; 

• The National Council of Ukraine for Science and Technology Development should play an active role in designing new policies, compiling and evaluating proposals from other stakeholders (including through the creation and maintenance of an analytical unit to support its activities);

• The functions of implementing the state policy in the field of science and innovation should be divided into the following three elements, completely independent of each other:

• Institutions that provide competitive funding, such as the National Research Foundation of Ukraine, the Fund of the President of Ukraine for Support of Education, Science and Sports, and the Innovation Development Fund; it is recommended to diversify this unit by creating an ecosystem of similar organizations aimed at supporting different types of research and innovation; the same unit should include a body that would provide competitive funding under state targeted programs (it can be either the National Research Foundation or a standalone foundation), and a body that would allocate budgetary funding for research and development in the field of defense and security technologies on a competitive basis (the National Agency for the Development of Defense and Security Technologies);

• Bodies that perform the functions of the founder of public research institutions, including the provision of basic funding, state supervision over the management of state/municipal property granted to the research institution for management/use, formation of supervisory boards of public research institutions according to the criteria established by law; for the general coordination and management of these functions, it is recommended to establish a separate body - the National Agency of Science and Technology;

• A public body that performs the function of assessing the results of scientific and innovation activities (National Agency for Assessment of Scientific Activities); at present, no such body exists.

3.4.2.2 Institutional changes

The implementation of the reform envisages:

• Conducting an assessment of the scientific activities of institutions applying for the status of a public research institution with the wide involvement of leading foreign experts to determine their compliance with the established criteria and requirements for scientific institutions; it is crucial to conduct the assessment not only at the level of the institution but also at the level of its individual structural units;

• Formation of State Key Laboratories, National Laboratories, and scientific societies on a voluntary basis out of the network of scientific institutions that have been granted the status of a public scientific institution based on the results of the assessment; the principles of such consolidation, among other things, may include the prevailing nature of the scientific activity (fundamental research and applied research of a low level of technological readiness, as opposed to applied research of a high level of technological readiness and innovation); as opposed to the national academies of sciences, these societies serve neither as state science management bodies nor as main budget allocators but can perform functions delegated to them by scientific institutions (coordination of activities, legal and financial support, fundraising, communication with authorities, the media, business, etc;)

• Transformation of the National Academy of Sciences of Ukraine and national branch academies of sciences into civil society organizations and/or voluntary scientific societies (voluntary associations of scientific institutions) that do not have the status/functions of budgetary funds allocators; 

• The functions of the budgetary funds allocator for scientific institutions (in terms of basic funding) are transferred to the National Agency of Science and Technology, with basic funding distributed according to a formula determined by law, depending on the results of the scientific activity assessment;

• Adoption of governmental decisions on reorganization/liquidation of state research institutions, which, in accordance with the recommendations from the assessment and considering the recommendations of labor collectives and/or the National Agency of Science and Technology:

• Obtain the status of a public research institution (with the possibility of being included in one of the scientific societies);

• Change their main type of economic activity and convert to another type of legal entity (state enterprise, etc.)

• Transform into a structural unit of another legal entity (public or budgetary research institution, higher education institution, enterprise, government agency, etc.) with the loss of legal entity status; 

• Liquidation with the privatization of property or its transfer to other research institutions;

• Digitalization of tools for collecting and analyzing data about science and innovation (by developing the functionality of the national electronic scientific information system URIS and implementing relevant EU and OECD instruments);

It is assumed that the new system of management of a scientific institution should rely on a legally defined balance of powers between the head of the institution and the collegial governing bodies defined by the charter of the scientific institution. The main collegial governing body (academic council, scientific and technical council, etc.), which is elected from among the researchers, determines the development strategy of the institution and its internal policies. It makes strategic decisions on scientific, educational, and innovative activities, whereas the head of the research institution is responsible for implementing the strategy and organizing the day-to-day activities of the institution.

To exercise certain powers of the founder in scientific institutions (except for those that will remain budgetary institutions under the Law, such as scientific institutions involved in the field of national security), the founder establishes a supervisory board as a mandatory governing body, which includes representatives of the founder and other external stakeholders. A list of core issues of the scientific institution's activities should be established by law, the final decisions on which shall be passed by the supervisory board, in particular, at the request of the founder, head, and/or main collegial governing body, including decisions on: 

• Approving the charter of the scientific institution and amendments thereto;

• Appointing the head of the scientific institution elected in accordance with the procedure established by the charter and conclusion of a contract with him/her;

• Dismissing the head of the scientific institution (either on his/her own initiative or at the request of the main collegial governing body or the founder);

• Approving the development strategy, financial plan, and financial report of the research institution;

• Approving the system of remuneration of teachers and employees (at the request of the head of the scientific institution and/or the main collegial governing body);

• Approving decisions on the establishment of subsidiaries, decisions on the conclusion of partnership agreements with other institutions and organizations, the institution's membership in scientific associations, etc;

• Supervising compliance with the charter of the scientific institution by the management and public self-government bodies.

In addition to governance functions, the supervisory board may also play an important role in fundraising and communication, in particular with potential international and private partners. The founder has the right to delegate other responsibilities to the supervisory board, except for those that are prohibited from being delegated by law.

The legislation should determine and align:

• The scope of matters regarding scientific, educational, and innovative activities of a scientific institution, the final decisions on which are to be made by its main collegial governing body, in particular, at the request or with the approval of the head of the institution and/or the supervisory board;

• The range of issues of the day-to-day activities of the scientific institution, the final decisions on which are made by the head, in particular, at the request or with the approval of the main collegial governing body and/or the supervisory board;

• Procedures for resolving possible conflicts between governing bodies;

• The principle for forming the organizational structure of a research institution and its main collegial governing body, based on the concept of a research team (“laboratory”) as the main structural unit. A research team here means a group of scientists conducting research on a certain topic that is different from other teams of the institution and is headed by a scientific supervisor. Research teams are formed and changed by the decision of the main collegial governing body as either permanent (using basic funding) or temporary (using funding obtained through competitions).

• The right of the scientific supervisors of research teams to manage the funding they receive through competitions.

• Inclusion of foreign nationals in supervisory boards and research groups.

We propose abolishing the enactment of decisions of the main collegial governing body by the head of a scientific institution, as well as their right to appoint a part of the members of the main collegial governing body. 

A scientific institution has the right to independently, pursuant to its charter and the legislation, resolve other issues of forming a management system, including the naming, structure, and powers of management bodies, planning of activities, reporting, etc.

3.4.2.3. Funding

Implementation of these changes requires the allocation of additional budgetary funds and seeking extra-budgetary funding for the:

• Establishment and operation of the National Agency for Transformation of Science and Technology 

• Establishment and operation of the National Agency for the Development of Defense and Security Technologies

• Establishment and operation of the National Agency for Research Assessment and expenses related to the assessment;

• Development of the national electronic scientific information system URIS with the aim of full digitalization of data collection and analysis in the fields of science, technology, and innovation based on the OECD Science, Technology and Innovation Guidelines;

At the same time, at least some of the funds for the aforesaid purposes may eventually be covered by the funds currently allocated for the operation of the Presidia of the national academies of sciences as well as funds that will be released in the course of optimization of the network of scientific institutions (including funds received through the privatization of surplus property). Although the suggested amendments do not imply additional funding for scientific institutions, additional funding would be highly beneficial for creating economically competitive working conditions in scientific institutions.

3.4.3. Funding science and innovation

3.4.3.1. Regulatory and legal framework

It is necessary to amend a number of laws regulating the system of science and innovation financing, in particular the Budget and Tax Codes, the Law of Ukraine On Scientific and Scientific-Technical Activities, the Law of Ukraine On Science Parks, etc. in terms of:

• Introduction of a fully functional system of multi-channel budgetary financing of scientific activities, which is distributed along several independent funding channels:

• Basic institutional funding, which is allocated by the state founders (for public research institutions, this is the National Agency of Science and Technology) between scientific institutions and higher education institutions established as legal entities of public law, according to a predetermined formula based on the assessment of the results of their scientific and/or innovative activities;

• Competitive funding (institutional, project, and individual) through the National Research Foundation and other specialized funds;

• Competitive funding (for projects and institutions) under state targeted programs; 

• State commissioning for research and development in the field of defense and security technologies, which is allocated through a specialized agency;

• Co-financing programs for joint research projects with businesses and foreign partners.

• Establishing state funds and encouraging the creation of non-state specialized funds to support the commercialization of scientific research, providing individual support to talented young people (in particular, through scholarships for studying in higher education institutions);

• Granting the right to researchers (heads of research teams) who have received targeted (grant) funding for their projects to independently manage the funding received and use the infrastructure of their institution (their organization) in compliance with the grant agreement and the terms of funding provided by the grantor;

• Creating a supportive legal framework for cooperation between research institutions, higher education institutions, and businesses, providing incentives and enabling researchers to enter the field of innovation, and businesses to engage in R&D and the co-creation of knowledge and innovation;

• Introducing a system of incentives, including tax incentives, to encourage businesses to invest in research and innovation;

• Creating legal conditions for the formation of clusters of advanced science with international funding;

3.4.3.2. Institutional changes

A set of legislative decisions needs to be made regarding:

• Relaunching the National Council for Innovation Development as a platform for interagency policy coordination and communication with actors within the innovation ecosystem;

• Revision of the National Strategy for Innovative Development

• Developing an ecosystem of agencies that provide competitive funding, including the establishment of a state agency that will finance strategically important research projects (defense, security, etc.), and the creation of specialized funds to provide grant support for applied research and innovation at different levels of technological readiness;

• Development of a framework/criteria for independent assessment of research and innovation activities and establishment of the relevant National Agency (see section 2 above) to carry out such assessment;

• Development of principles for allocating basic funding to research institutions based on the results of the assessment;

• Implementation of the OECD Guidelines on Science, Technology and Innovation.

3.4.3.3 Funding

Changes in the mechanisms of public funding of scientific institutions do not entail changes in the scope of such funding. However, the introduction of new mechanisms can increase the efficiency of the allocation and use of public funds. The gradual increase in extra-budgetary revenues of scientific institutions is also expected due to the growing level of their administrative and financial autonomy. 

At the same time, a tangible effect of the updated mechanisms of public funding of scientific institutions will be attained only upon an increase in the total scope of public funding, since at the current level each of the described funding channels will dispose of too few resources.

This component of the reform does not envisage changes in the volume of funding for government agencies that have to prepare, adopt, and implement relevant legislative adjustments. Nevertheless, additional funding, including extra-budgetary funding for organizational and other expenses, will accelerate the elaboration of detailed drafts of the necessary changes, their negotiation, and approval by all stakeholders.

3.4.4. Quality of research and innovation

3.4.4.1 Regulatory and legal framework

A number of laws and regulations need to be amended, specifically in terms of:

• Abolition of state-guaranteed bonuses for academic titles and/or academic degrees without cutting the total payroll, elimination of the single tariff scale for research and academic staff

• Delegation of the right to make the final decision on awarding academic degrees and academic titles to scientific institutions and higher education institutions, provided they meet the requirements established by law;

• Differentiation of requirements for the scope of scientific and innovative activities for higher education institutions of different profiles and for providing different types of educational programs (research universities, universities of applied sciences, higher education institutions, art institutions, educational programs of scientific, academic, and professional orientation, etc;)

• Providing support for various forms of self-organization of the scientific community and its participation in the development of industry-specific quality criteria/standards;

• Introducing reputation indicators into the criteria for competitions for funding research and innovation projects;

• Legal definition of the right of grantors to exclude from competitions persons who have committed violations of academic integrity in the implementation of projects funded by grants for a certain period of time;

• Broad introduction of tools for external independent expertise in assessing the results of scientific activities of institutions, research teams, and individual scientists; internationalization of evaluation procedures;

• Emphasizing research quality indicators when developing criteria for assessing research activities; 

• Introducing the practice of providing letters of recommendation in the competitive selection of project managers and heads of research institutions.

3.4.4.2 Institutional changes

• Establishment of the National Agency for Research Assessment (see Section 2) and ensuring its expert capacity (building a pool of experts, with a focus on an international component);

• Creation of tools to support and develop various forms of self-organization within the scientific community, including public initiatives to monitor academic integrity and develop the concept of scientific reputation;

• Training of communication specialists who ensure the flow of knowledge and interaction between scientists, businesses, the state, and society, in particular by encouraging the creation of relevant educational programs in the field of lifelong learning and elective blocks in master's degree programs;

3.4.4.3. Funding

Since promoting quality research and innovation involves a significant scale-up of the use of independent expertise, it will also require increased funding to pay for expert labor. Typically, expenditures on peer review account for 1-2% of the total funding allocated.

At least partially, these costs can be covered by international technical aid instruments (e.g., to cover the cost of participation of foreign experts).  In any case, the expenses for expertise are justified from an economic standpoint: it is worth spending a thousand hryvnias to be sure that a hundred thousand are used effectively. 

Since the empowerment and revitalization of the scientific community, i.e. the growth of its social capital will directly contribute to the quality of research and innovation, it is also advisable to invest additional financial resources in grant support for the creation and functioning of professional scientific societies and other research associations.

3.4.5. Network of scientific institutions

3.4.5.1. Regulatory and legal framework

A package of governmental decisions should be adopted regarding:

• Governmental strategy for the development of the national research infrastructure, its integration into the European Research Area and the relevant state target program;

• Introduction of shared access to research infrastructure, data reuse, and other principles of Open Science;

• Strategies for monitoring the effectiveness of the network of scientific institutions;

• Decision-making procedures for the creation of new institutions or their reorganization;

3.4.5.2. Institutional changes

It is assumed that the national network of scientific institutions is integrated into the European Research Area, its core consisting of public institutions that are members of one of the scientific societies, and higher education institutions (research universities, universities of applied sciences) that have scientific/research units and whose scientific activities meet certain criteria for the significance of scientific results and quality of research, which should be established with due regard to their main field(s) of research.

The general network of scientific institutions may also include:

• Public institutions that are not members of scientific societies;

• Budgetary and private scientific institutions that comply with the established requirements for scientific institutions;

• Scientific departments of enterprises, institutions, and organizations that meet the requirements for scientific departments;

• Temporary structures (state key laboratories, etc.) created on the basis of national and/or international competitive funding for a period of 5-7 years to enhance capacity in strategically important areas of scientific activity with possible prolongation based on the results of their activities.

The development of centers for the collective use of equipment should be assigned a crucial role in optimizing the use of infrastructure.

3.4.5.3. Funding

Development of the national research infrastructure to a competitive level requires a reconsideration of the terminology of budget planning and reporting, in particular, reclassification of the relevant funding as public investment. Therefore, in addition to state budget funds, efforts should be made to maximize the use of international technical aid available as part of Ukraine's integration into the EU and to encourage private investment.

3.4.6. Communication of reforms to society

The Verkhovna Rada of Ukraine, governing bodies in the field of science and innovation, scientific institutions and their founders, institutions, organizations, and enterprises with scientific departments and research teams must implement the decisions.

The biggest opponents of the reform may include:

• Managers and employees of government bodies – due to the curtailment in powers of the relevant agencies in charge of managing scientific institutions, as well as the need to introduce new procedures for planning and implementing budgetary funding of scientific and innovation activities, which will entail the need for additional training of employees. This can be mitigated, in particular, by shifting the focus of their activities towards the development of state and regional policies in the field of science and innovation, analytical and forecasting activities. Today, such functions are envisaged, but due to a lack of human and material resources, they are not fully performed. Another tool is the additional extra-budgetary funding for the organization of relevant training.

• Employees of the Ministry of Finance and the Tax Service – due to the need to change the attitude toward science as a sector supported by the state, and instead view it as a sector that creates the knowledge and innovations necessary to accelerate socio-economic development. This can be overcome by appropriate training.

• Employees of the national academies of sciences due to a significant reduction in the relevant apparatus. This can be partially overcome by hiring employees who meet the established criteria and requirements to work in the offices of scientific societies and civil society organizations, into which the existing national academies are expected to be transformed;

• Heads of state and municipal scientific institutions – due to increased financial risks and personal responsibility arising from increased institutional autonomy. This can be overcome through a balanced increase in the opportunities offered by financial autonomy, as well as through training of managers and employees of financial departments of scientific institutions;

• Employees of scientific institutions – due to changes in the assessment criteria for their performance, raising the bar for the quality of scientific results, as well as increasing the authority of the institution's governing bodies, which may lead to dismissal or downgrading of insufficiently active employees. This can be partially overcome by envisaging a transition period during which the new evaluation criteria will come into effect, as well as by ensuring transparency of the activities of all governing and self-governing bodies of the institution and its structural units. The change of status and the expansion of the autonomy of a research institution should occur concurrently with the reform of the internal management system of research institutions, which should provide for the balance of powers and responsibilities between the head of the institution and its collegial governing and self-governing bodies, as well as the involvement of all stakeholders in decision-making. 

• Managers and employees of scientific institutions that based on the results of the assessment may be subject to reorganization or liquidation due to their failure to meet the criteria for the status of a scientific institution or their inability to operate as a public institution. This group will be the most numerous and will account for the main negative social impact of the reform. This problem can be partially overcome by taking the most conservative approach to preserve human capital: in particular, by separating capable structural units and merging them with other research institutions, providing certain social guarantees to dismissed employees during a transition period, or imposing a moratorium on dismissals during this period, creating new jobs in knowledge-intensive production or services, innovation centers, expert advisory or analytical institutions, etc. Some of these employees will be needed in the NUS and will strengthen the quality of teaching in high school.

The main challenge may arise from the need to reshape the mindset of both research and innovation officials and the heads as well as employees of the relevant institutions. The reason for this relates to the fact that the reform inherently implies a change in the owner/property relationship between the government and research institutions to one of partnership in the development of the science and innovation system and the state as a whole. Therefore, a transition period should be defined for the gradual change of the status of scientific institutions that meet the established criteria, and relevant pilot projects should be implemented, if possible.

3.4.7. Steps/stages of change

The main steps of the proposed changes may include:

• Agreeing on the concept of a scientific institution as a "public institution" with all stakeholders (professional communities, experts, civil society organizations, and governing bodies in the field of science, central executive bodies in the area of finance, economic development, anti-corruption policy, etc., MPs, experts in the field of civil and commercial law) – 2024;

• approval of the updated concept of "scientific institution" (spectrum of economic activities, rights, and obligations, management structure) by all stakeholders - 2024;

• Agreeing on the concepts of new models of financing science and innovation, management in the field of science and innovation, ensuring the quality of research and development, and developing a network of scientific institutions - 2024;

• Reflecting the updated system of science and research financing in the state, regional and local budgets - 2026-2030;

• Introduction of a package of necessary amendments to the laws of Ukraine and their adoption by the Verkhovna Rada of Ukraine - 2024/2025;

• Development and approval of the relevant regulatory documents by the CMU and central executive bodies - 2024/2026;

• Implementation of new norms in the constituent and internal documents of scientific institutions (organizations, enterprises) that have research departments - 2025/2030;

• Evaluation of the preliminary results of the reform and introduction of necessary amendments to the legislation - 2026/2030.

3.4.8. Criteria for assessing the success/failure of the reform

The criteria for assessing the success/failure of the reform may include the following indicators:

• All instruments for collecting data on science and innovation are fully digitalized;

• The development of state policy in the field of science and innovation is based on the analysis of collected data and performed with the involvement of scientists;

• The total amount of expenditures on research and innovation activities has grown to 2% of the GDP, with at least half of this figure comprising funds from Ukrainian and foreign businesses, as well as funds from foreign donors provided for the post-war reconstruction of Ukraine;   

• In the total budgetary funding of scientific and innovation activities, various forms of competitive funding account for at least 20%;

• All competitive funding is allocated on the principles of independent expertise;

• The share of foreign experts involved equals at least 20% and exhibits an upward trend; 

• Ukraine has moved from the Emerging Innovator to the Moderate Innovator category in the European Innovation Scoreboard;

• The average salary of a scientist with a scientific degree is at least two times higher than the average salary in Ukraine;

• The share of self-generated revenues (through raised business funds, national and international competitive funding, and the provision of services) in the budgets of scientific institutions make up an average of 10% and above;

• The emergence of private research institutions or public research institutions with a share of private funding exceeding 10%, as well as centers for advanced science with a share of international funding exceeding 10%;

• The emergence of commercial knowledge-intensive enterprises founded or co-founded by research institutions and higher education institutions; 

• A doubling of the scope of innovative activities conducted with the participation (as founders, co-founders, partners) of scientific institutions or higher education institutions compared to 2021.

• Increased competitiveness of Ukrainian research institutions, which can be measured, among other things, by their improved positions in global and European scientific rankings, an increase in the number of foreign scientists and innovators, including those from the EU and OECD countries, conducting joint research and development in Ukraine;

• Number of joint projects between Ukrainian scientists and scientists from the EU and OECD countries;

• Growth of performance indicators, as well as tangible results of scientific, innovative, and international activities of research institutions;

• Increased academic mobility among scientists and, as a result, improved research quality;

• Increased impact of scientific institutions on the socio-economic development of Ukraine, its regions, and communities;

• Increased responsibility of employees of scientific institutions for their own institution and research team, as well as their involvement in the management of the institution through collegial governing bodies (self-government) according to surveys of employees of scientific institutions;

• Enhanced participation of Ukrainian scientific institutions in the activities of international and European organizations for science and innovation and international scientific cooperation, raising their influence on decision-making concerning the development of science and innovation in the EHEA and the European Research Area.

3.5 RED LINES WHICH CANNOT BE CROSSED IN THE FIELD OF SCIENCE AND INNOVATION 

Implementing organizational or structural reforms without collecting reliable and relevant data, or modeling the consequences; implementing policies integral to the same aspect of transformation asynchronously.

• Tolerating violation of academic integrity or pseudoscience, violation of research standards, and failure to avoid academic conflicts of interest.

• Postponing the reform of the legal status of state research institutes and the national academies of sciences

• Only using the state budget to fund research that has a close prospect of practical application.

• Undertake large-scale organizational reforms in the scientific sphere without simultaneously significantly increasing the level of funding (enhancing quality requirements should go hand in hand with providing decent working conditions).

• Introducing new funding instruments only by cutting spending on existing programs (“zero-sum game”).

• Making decisions on targeted state funding of specific areas without analyzing their capacity, setting goals or providing adequate resources.

• Cultivating intolerance of scientific mistakes (absolutizing the criterion of efficiency in the use of funds).