This lecture offers thoughts on some issues concerning the effective development of the European space of higher education currently being pushed by the twin forces of the Bologna process and the Lisbon declaration of the EU. It is pointed out that the USA example is a good reference point but cannot be imitated mechanically, given the more segmented reality of Europe. It is noted that the European space could develop first at the graduate level and that the competition for students through reputation effects may play an essential role. The significance of policy initiatives for promoting reform is emphasized. Finally, matters of governance and of incentives (including tenure) are identified as key factors of reform
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