A blueprint for turning around poor performance by European universities has called for more money, greater autonomy, better student mobility and increased competition.
The study by the Brussels-based higher education think-tank Breugel says growth of the sector in continental Europe has been disappointing for 30 years, particularly in comparison with the US.
It examines the higher education systems of continental Europe and the US and identifies a number of key differences.
The first is the low level of student mobility in Europe, a problem the report says is unlikely to be solved by the Bologna Process. Bologna aims to create a "European space of higher education" in which undergraduate education is more easily comparable across the Continent, but the report predicts it will not succeed in increasing mobility between countries.
The study also suggests that more general and flexible curriculums could help cut failure rates at undergraduate level.
Noting that most students choose an institution by its proximity to their home and thus limit their choice of courses, Breugel argues that allowing undergraduates to wait one or two years before they specialise will reduce the impact of this lack of mobility on completion rates.
A third finding is that the research performance of European universities lags far behind those in the US, particularly among elite institutions.
To counter this, it says, "selection (of students) at entry should become the norm, specialisation and mobility should be encouraged, and fees are easier to justify if supported by scholarships, income-contingent loans and teaching assistantships."
The study concludes with a series of recommendations for tackling poor performance. It calls for funding to universities to be increased, noting the considerable investment gap between Europe and the US.
In 2005, 39 per cent of the US population was educated to degree level, compared with only 24 per cent in the European Union. The US devoted 3.3 per cent of gross domestic product to higher education compared with Europe's 1.3 per cent. Breugel suggests that the proportion of GDP that Europe spends on higher education should almost double over the next ten years.
Universities also need more freedom, it says. "Autonomy and funding are mutually reinforcing factors", it says, and institutions have more autonomy in the US and other high-performing countries than they do in Europe.
The study adds that more mobility will increase competition between institutions for students and faculty and strengthen the sector.