Contents
Network effects are not limited to telephones and social networks. Standards work the same way: a plug, a railroad gauge or a university degree becomes more useful the more others use the same standard. The Bologna Process is a good example of how countries deliberately set such an effect in motion and how it creates a bond that is almost impossible to undo.
A patchwork
Situation
At the end of the 1990s, almost every European country has its own degrees. Germany has the Diplom, the Magister and the Staatsexamen (state examination); elsewhere there are the licence, the laurea or the bachelor’s degree. If you study abroad, you have to go through a laborious process to get your coursework recognized. If you move to another country with a degree, you first have to explain what it actually means.
Link to the principle
Without a common standard, every degree remains trapped in its national network. Its value ends at the border. This is the starting point at which a network effect makes the biggest difference.
Four countries make a start
Situation
In May 1998, the education ministers of France, Germany, Italy and the United Kingdom sign a declaration at the Sorbonne in Paris on harmonizing their higher education systems. A year later, on June 19, 1999, representatives of 29 countries sign the Bologna Declaration in Bologna. It is a voluntary agreement between states, not EU law. The goal: to create a European Higher Education Area within 10 years, with comparable degrees and free mobility for students, teachers and researchers.
Link to the principle
A network needs critical mass at the outset. Four large countries get things started, and 29 countries then give the project so much weight that others cannot afford to stay out.
Shared building blocks
Situation
At the core of the process are a tiered system of bachelor’s, master’s and doctoral degrees and the European Credit Transfer and Accumulation System, ECTS for short. Coursework is measured in credits that are meant to count the same everywhere. In addition, there are common rules for quality assurance.
Link to the principle
A common credit system is like a common plug. Every university that introduces it makes the coursework of all the others creditable at its own institution, and its own coursework creditable at all the others. The value for each individual grows with the number of participants.
The network grows
Situation
In 2010, the European Higher Education Area is proclaimed at a conference in Budapest and Vienna. Today, 49 countries belong to it, along with the European Commission. Russia and Belarus have been suspended since 2022 (as of 2026).
Link to the principle
From 29 to 49 countries: that is the typical growth curve of a network. Every country that joins gains access to all the others. And every new member makes membership more valuable for everyone. Conversely, the suspension shows how much exclusion costs.
The bond
Situation
In Germany and other countries, universities fundamentally restructured their degree programs in the years after 1999. Examination regulations, curricula, accreditation and the labor market have adjusted to the new degrees. The reform was and remains controversial, for example because of more regimented, school-like programs and a heavy load of exams.
Link to the principle
This is lock-in at work. Even where criticism is loud, withdrawing is hardly conceivable. A country that went back would cut its students off from the common network and pay all the conversion costs a second time. That is why the standard holds even where it is not loved.
Key takeaways
Key lessons
- A common standard can be more valuable than the best individual solution.
- Make sure you reach critical mass at the start.
- Every new member strengthens everyone who is already in.
- If you introduce a standard, plan on it staying for a long time.
- Distinguish between “we stay because it’s good” and “we stay because leaving is too expensive.”
Summary
The 1999 Bologna Declaration committed 29 countries to comparable degrees and a common credit system. With every country that joined, coursework and degrees became more valuable in all the others. Today, 49 countries take part. Because universities have converted their entire system, withdrawing is hardly conceivable. This shows network effects and lock-in in education policy.
Sources
- Carl Shapiro, Hal R. Varian: Information Rules: A Strategic Guide to the Network Economy. Boston: Harvard Business School Press 1999.
