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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.
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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.
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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
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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
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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).
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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.
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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.
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[...]... 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
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