International Institute for Educational Planning N.V. Varghese Globalization, economic crisis and national strategies for higher education development Research papers IIEP Globalization, economic crisis and national strategies for higher education development Globalization, economic crisis and national strategies for higher education development N.V. Varghese International Institute for Educational Planning The views and opinions expressed in this book are those of the authors and do not necessarily represent the views of UNESCO or IIEP. The designations employed and the presentation of material throughout this review do not imply the expression of any opinion whatsoever on the part of UNESCO or IIEP concerning the legal status of any country, territory, city or area or its authorities, or concerning its frontiers or boundaries. The publication costs of this study have been covered through a grant-in-aid offered by UNESCO and by voluntary contributions made by several Member States of UNESCO, the list of which will be found at the end of the volume. Published by: International Institute for Educational Planning 7-9 rue Eugène Delacroix, 75116 Paris, France info@iiep.unesco.org www.iiep.unesco.org Cover design: IIEP Typesetting: Linéale Production Printed in IIEP’s printshop iiep/web/doc/2009/08 © UNESCO 2009 5 Abstract Higher education has undergone tremendous expansion in the recent past. The growing employment opportunities and the increased skills needed to compete in the global labour market are important reasons for the expansion of the sector. This paper argues that higher education in the context of globalization has become a market-determined process, replacing the near monopoly enjoyed by the state. The growth of private and cross-border higher education refl ects this change. The paper discusses cross-border education through three different forms – through the mobility of institutions, of students, and of teachers. Cross-border student mobility is encouraged since it is a good source of getting future highly skilled workers in certain specialized areas. Institutional mobility is very often from the developed to less developed countries. Student mobility, on the other hand, is from the less developed to developed countries. The United States of America (USA) is the preferred destination for cross-border education and nearly three fourths of all cross-border students are hosted by 10 member countries of the Organisation for Economic Co-operation and Development (OECD). The current economic crisis, although it started from the fi nancial systems of the developed countries, is global in its reach as it spreads to both middle- and low-income countries. The initial indications are that the crisis will result in heavy losses in employment and in household income levels. The crisis may lead to reduced funding for education from all sources – government, private sector and households. Many universities with investments in foreign banks have already lost their investments. Student support systems, scholarships and student loans will be severely affected. Some of the largest providers of student loans have lost heavily during the crisis, and some of them have fi led for bankruptcy protection in 2008. The fi nancial crisis may lead to a freeze on recruitment and a cut in programmes. The crisis may also lead to reduced aid fl ows. This paper points out that leaving the education sector to markets may not be a good option. It argues for active state intervention in higher education. There is a need to redefi ne the role of the state in the changed circumstances. The ideal situation would have been full state funding but it has to be recognized that the state has an important role to play, even when it does not have adequate resources to fi nance the higher education sector. The state needs to take responsibility for developing rules for establishing private and cross-border institutions, for putting in place mechanisms to ensure quality and regulations to ensure equity. Given the limited resources at its disposal, the state may better target its limited resources to disadvantaged groups to improve overall equity in higher education. International Institute for Educational Planning www.iiep.unesco.org 6 Contents Abstract 5 Contents 6 List of abbreviations 7 1. Introduction 8 2. Globalization and demand for skilled labour 11 3. Globalization and market orientation in higher education 14 4. Globalization of higher education and cross-border mobility 16 4.1 Cross-border institutional mobility 16 4.2 Cross-border teacher mobility 17 4.3 Cross-border student mobility 18 5. The economic crisis and its implications for higher education and employment 22 6. National strategies for the development of higher education 25 7. Concluding observations 28 References 30 International Institute for Educational Planning www.iiep.unesco.org 7 List of abbreviations AICTE All India Council for Technical Education DFID Department for International Development EFA Education for All FDI foreign direct investment GATS General Agreement on Trade in Services GDP gross domestic product GER gross enrolment ratio IBE International Bureau of Education IBM GBS IBM Global Business Services ICT information and communication technologies IIEP International Institute for Educational Planning IIM Indian Institute of Management IIT Indian Institute of Technology ILO International Labour Offi ce IMF International Monetary Fund IT Information technology JSE Johannesburg Stock Exchange MNC multinational corporation NUEPA National University of Educational Planning and Administration, New Delhi OECD Organisation for Economic Co-operation and Development R&D research and development RIHED Regional Centre for Higher Education and Development SNU Seoul National University TERI The Education Resources Institute TOI Times of India UGC University Grants Commission UIS UNESCO Institute for Statistics UNESCO United Nations Educational, Scientifi c and Cultural Organization UK United Kingdom of Great Britain and Northern Ireland USA United States of America USDC United States Department of Commerce International Institute for Educational Planning www.iiep.unesco.org 8 1 Introduction The education system has been expanding globally. More people are investing more of their time and money in education now than in the past. Although all levels of education have experienced expansion, the rate of growth has, perhaps, been greatest at the higher education level. Between 1991 and 2005, the number of students enrolled in institutions of higher education worldwide more than doubled from 68 to 137.9 million students (UNESCO Institute for Statistics – UIS, 2007). Gross enrolment ratio (GER) increased from 13.8 to 24 per cent in the same period. The GER varies between 5 per cent in the African region to 70 per cent in North America and Western Europe. While the target of the member countries of the Organisation for Economic Co-operation and Development (OECD) is to achieve the goal of universalizing tertiary education (OECD, 1998), many countries, especially in sub-Saharan Africa, still remain at a higher education enrolment level of less than 5 per cent and are concentrating their efforts in the struggle to universalize primary education. While all regions are benefi ciaries of the expansion of higher education, expansion has been uneven as shown in Table 1.1. Between 1990 and 2005, GER almost doubled in the Arab region, increasing from 11 to 21 per cent, and in South and West Asia from 6 to 11 per cent; in East Asia and the Pacifi c, GER tripled from 7 to 24 per cent. In Latin America, the increase from 17 to 29 per cent was moderate. However, expansion of higher education in Africa was slow – an increase from only 3 to 5 per cent. Since higher education grew more quickly in other regions, inter-regional disparities increased. Table 1.1 Higher education enrolment in 2005 Regions Enrolment in millions Enrolment share GER 1990 GER 1999 GER 2005 Arab States 6.8 4.9 11.0 19.0 21.0 Central and Eastern Europe 19.4 14.1 39.0 57.0 Central Asia 2.1 1.5 19.0 27.0 East Asia and the Pacifi c 41.6 30.2 5.9 13.0 24.0 Latin America and Caribbean 15.3 11.1 17.0 21.0 29.0 North America and Western Europe 33.4 24.2 35.6 61.0 70.0 South and West Asia 15.8 11.5 6.0 11.0 Sub-Saharan Africa 3.5 2.5 3.0 4.0 5.0 Total 137.9 100.0 13.8 18.0 24.0 No data available. Source: UIS (2007) and UNESCO (1998). International Institute for Educational Planning www.iiep.unesco.org Introduction 9 Expansion of the system is due to several factors. First, there is the pressure resulting from expansion at the lower levels of education. While part of this expansion is in response to the voluntary demand for education, another part of it is in response to public action. The promulgation of laws governing compulsory primary education has increased national commitment and international support to achieve the Education for All (EFA) goals. These initiatives have generated demand for primary education, even from the most disadvantaged groups and from those living in remote areas. As a result of the expansion of the lower levels of the education system, demand for education at the secondary and post-secondary levels has in turn increased. The move, in many countries, towards the universalization of secondary education has increased the number of candidates eligible to enrol in higher education, thus putting additional social pressure to expand the higher education sector. Second, the rapid expansion of higher education in the recent past is also a refl ection of increasing employment opportunities for university graduates. The public sector used to be the largest employer of university graduates in developing countries. Employment in the public sector has declined and many countries, in the context of globalization, have promoted the private sector of their economies. The slowdown in employment generation in the public sector has, very often, been offset by employment creation in the private sector. Furthermore, recognizing the changing skill requirements in the context of globalization, many countries not only universalized school education but also ‘massifi ed’ their higher education systems. Now it is globally recognized that an expanded higher education sector has become a necessary condition for a country’s growth in the present environment; it is important in promoting faster technological catch-up and in improving a country’s ability to maximize economic output (World Bank, 2002). As noted earlier, the OECD countries are moving towards the universalization of tertiary education (OECD, 1998) while countries in Africa are taking steps to expand higher education to ‘accelerate catch-up’ (World Bank, 2009). Third, recent trends in expansion also indicate the fast growth of private and cross-border education. The number of students pursuing studies in domestic and private institutions has increased and, in cross-border institutions, it has almost doubled to 2.7 million in the last decade. Although better job opportunities and higher salary expectations can be important reasons, the growth also refl ects changes in the provision of higher education facilities. This paper addresses issues related to the globalization of higher education, focussing on cross- border education – the cross-border mobility of students, of teachers and of institutions. The expansion of cross-border education refl ects the increasing demand for domestic degrees in the employment market in the developed world, and for foreign degrees for migrant workers in the employment market in the developing world. The cross-border education market seems to have the propensity to attract good brains from the developing world to meet the requirements of the global labour market, both domestic and foreign. Private individuals are willing to pay a higher price for cross-border education since the returns from their investment are high. Private agencies are also willing to invest in cross-border education since such an investment is profi table. This paper argues that higher education in the context of globalization has become a market-determined process, replacing the near monopoly position previously enjoyed by the state. Therefore, there is a need to review and revise public policies for promoting higher education. The state needs to redefi ne its role in facilitating expansion with equity and in ensuring quality. The current fi nancial crisis has underlined the need for public intervention to regulate market processes. National strategies for the development of higher education need to focus on developing regulatory measures to promote equity and quality as the system expands. These regulations are equally or even more needed in the cross-border segment of higher education. International Institute for Educational Planning www.iiep.unesco.org 10 Introduction The paper is organized as follows: Section 2 discusses the increasing demand for higher skills in the global labour market. Section 3 analyses the way in which market principles have permeated the process of globalization of higher education. Section 4 deals with the cross-border mobility of institutions, students and teachers in higher education. Section 5 discusses the implications of the current economic crisis for the globalization and the development of higher education. Section 6 deals with national strategies to develop higher education, and the fi nal section draws some conclusions from the analysis carried out in the paper. International Institute for Educational Planning www.iiep.unesco.org [...]... period, have helped attract foreign direct investment (FDI) and multinational corporations (MNC) to developing countries Outsourcing became an attractive strategy for large 11 International Institute for Educational Planning www.iiep.unesco.org Globalization, economic crisis and national strategies for higher education development firms in developed countries and it became an avenue for lucrative jobs in... cross-border education as their next best option 21 International Institute for Educational Planning www.iiep.unesco.org 5 The economic crisis and its implications for higher education and employment Many countries affected by the economic crisis are struggling to develop strategies to arrest the adverse effects of job and income loss on their citizens How does the crisis affect the development of higher education. .. Administration and management of education Decentralization – participation – distance education – school mapping – teachers Economics of education Costs and financing – employment – international cooperation Quality of education Evaluation – innovation – supervision Different levels of formal education Primary to higher education Alternative strategies for education Lifelong education – non-formal education. .. Japanese higher education In: Higher Education, 34(2), 259-273 Li, M.; Bray, M 2007 “Cross-border flows of students for higher education: push-pull factors and motivations of mainland Chinese students in Hong Kong and Macau” In: Higher Education, 53(6), 791-818 Mabizela, M 2006 “Recounting the state of private higher education in South Africa” In: N.V Varghese (Ed.), Growth and expansion of higher education. .. the UK has shown that salaries and working conditions for teachers have not kept pace with those of other sectors (Robinson and Smithers, 1998) To overcome teacher shortages, the UK and USA governments (New York) have engaged 17 International Institute for Educational Planning www.iiep.unesco.org Globalization, economic crisis and national strategies for higher education development in the large-scale... politics, policy and legislative action Dordrecht: Springer Varghese, N.V 2009b “GATS and transnational mobility in higher education In: Global Education Research Reports New York: Institute of International Education, and American Institute for Foreign Study Foundation (forthcoming) 32 International Institute for Educational Planning www.iiep.unesco.org References Verbik, L.; Jokivirta, L 2005 National regulatory... 2008 “Internationalization of higher education: complexities and realities” In: D Teferra and J Knight (Eds.), Higher Education in Africa: the international dimension Boston: Center for International Higher Education, Boston College, Massachusetts; Accra: Association of African Universities 30 International Institute for Educational Planning www.iiep.unesco.org References Koshi, U 1997 “Internationalization... Varghese, Professor and former Head of the Educational Planning Unit at NUEPA (New Delhi), is currently Head of Governance and Management in Education at IIEP He has published widely in the areas of educational planning, financing and quality His most recent publications concern the areas of institutional restructuring of higher education and private higher education International Institute for Educational... therefore, can be a reliable provider of education This provided an opportunity for the corporate sector to operate in education and apply market principles to the management of education institutions The provision and promotion of education activities under the market framework of operation are based on the demand for and supply of educational services While the demand for education reflects the paying capacity... unacceptable policies in the present context 24 International Institute for Educational Planning www.iiep.unesco.org 6 National strategies for the development of higher education Universities and institutions of higher education traditionally were public institutions The state invested resources to set up universities and was responsible for funding and controlling their activities When governments were in financial . IIEP Globalization, economic crisis and national strategies for higher education development Globalization, economic crisis and national strategies for higher. International Institute for Educational Planning N.V. Varghese Globalization, economic crisis and national strategies for higher education development Research