In contrast to U.S. colleges, German universities are not ranked; students are placed in universities by a central agency that sometimes works in mysterious, if not Kafkaesque, ways; private universities are almost unknown; and the public universities are virtually barred from improving themselves by charging greater than nominal tuition fees, raising foundation money, or making deals with private companies.

The German double doctorate, still generally a requirement for obtaining a tenured faculty position, instead of being the guarantee of excellence it once was, has become one of the many impediments to universities trying to attain world-class status. Scholars still toil for that second degree like graduate students well into their forties, and by the time they finally secure one of the coveted tenured positions in their fifties, they are often too tired and too far over the hill to make the most of it. Their counterparts in the United States or Great Britain might hold named professorships before they are out of their twenties, with custom-built labs at their disposal.

Two years ago, at one of Germany's most famous and prestigious universities, the faculty in Asian studies—a field that's underdeveloped in Germany compared to similar study programs found at any major U.S. university—were still debating whether Greek and Latin should be a requirement for a faculty appointment. The old guard clung to the position that it would not be enough to be fluent in Japanese or Chinese, German, and English—and at least somewhat competent in several other modern languages as well—but that classical Greek and Latin also were a sine qua non.

The situation, thankfully, is not so bad in the engineering and physical sciences, where educational programs tend to be more tightly structured and students are given concrete tasks to execute. Some of Germany's so-called Fachshochschulen (applied science universities) and polytechnics—the technical universities of Berlin and Aachen among them—offer cosmopolitan learning environments and attract grade-A students from around the world. But even at these, students and professors report, there's usually an overemphasis on theory and general grounding in principles and an underemphasis on practical work.

Especially in engineering education, continued success is essential to Germany's future. Despite global outsourcing trends, manufacturing still accounts for a quarter of Germany's domestic product, more than in any other leading industrial country.

Help is coming in the form of initiatives by both the German government and European authorities. First of all, Germans are debating plans to promote greater competition among universities by allowing them to select their own students, charge tuition, and establish their own profile—that is, seek to excel in some areas while leaving weaker fields to others.

A major impediment to the federal government's efforts, however, is the near-total control over education exercised by the state governments, which is enshrined in the country's "basic law." At present, the German Supreme Court is poised to rule on whether the general ban on charging tuition enforced by the states is constitutional [see photo, "No Fees!"].

Meanwhile, Chancellor Gerhard Schröder's government—a coalition of Social Democrats and Greens—has pledged additional funding for encouraging research and development and, in particular, for the creation of graduate schools. To that end, it wants to inject nearly ¤2 billion (US $2.3 billion) into a program to create a band of elite universities, in the hope of stimulating research and innovation.

University professors in Germany welcome the reform debate. "The problem is not that our lecture halls are overcrowded with 600 students; the problem is that they have no room for the top 100 students," says Volker Caspari, a professor of industrial engineering and economics at the Technical University of Darmstadt. "Our curriculums are tailored for the masses. What we need are high-profile graduate schools."

It isn't just the elite student, however, who stands to benefit from the reforms that are brewing. Forty European countries, including the 25-member European Union, have agreed under the so-called Bologna Accord to adopt U.S.-style higher education reforms. They will move to an undergraduate-graduate-postgraduate system by 2010, for two primary reasons: to make it easier for students to transfer credits and degrees within Europe and abroad, and to allow those seeking training for a profession to receive a degree within three to four years rather than five or six.

Germany's association of electrical and electronic manufacturers, ZVEI e.V. (the Zentralverband Elektrotechnik und Electronikindustrie), is fully behind the new degree program, according to the association's education expert, Bernhard Diegner. The program, he says, has numerous benefits: it will be more practically oriented, particularly at the undergraduate level, and it will allow graduates to enter the workforce earlier. "Employers are seeking engineers who are highly flexible and willing to work abroad," Diegner notes. "These are typically young people."

At the same time, the system will separate those who want to acquire a basic set of skills to become engineers from those who want to delve deeper and become researchers or academics. "The current five-year diploma [roughly equivalent to a U.S. master's degree] is very heavy on theory in the first three years," says Diegner. "The result is that many students quit...have nothing in their hands, and have to start all over."

In the estimation of individuals like Diegner, the introduction of tuition fees and, of course, more government money also will help, but still more is needed. "We also need to tap industry, as U.S. universities have been doing for decades," argues Caspari. "We have absolutely no corporate donation culture in Germany."

Caspari speaks from personal experience. A few years ago, Heidelberger Druckmaschinen AG, one of the world's largest makers of printing machines, approached his department for help in developing a program to assess the performance of the company's global procurement and production processes. "When we completed our research and provided Heidelberger executives with a solution, they asked what it would cost," Caspari recalls. "We said we can't charge them but they are free to make a small donation, say, of around ¤500 to help pay for some reference books in our library. They were up in arms over this request, which they later rejected. This is the mentality we are up against here."