Economist on higher education

Nice survey here. Some interesting points excerpted below.

Universities are a mess across Europe. European countries spend only 1.1% of their GDP on higher education, compared with 2.7% in the United States. American universities have between two and five times as much to spend per student as European universities, which translates into smaller classes, better professors and higher-quality research. The European Commission estimates that 400,000 EU-born scientific researchers are now working in the United States. Most have no plans to return. Europe produces only a quarter of the American number of patents per million people. It needs to ask itself not whether it can overtake the United States as the world's top knowledge economy by 2010, but how it can avoid being overtaken by China and other Asian tigers.

... India has two valuable things going for it. One is its collection of elite institutions. For decades, India has been pouring resources into the All India Institute of Medical Sciences, the Indian Institute of Science in Bangalore and, above all, the Indian Institutes of Technology. These institutions take their pick from an army of candidates every year, with 180,000 hopefuls taking the screening test for around 3,500 places in the seven IITs. They provide a highly intensive education, with all students and often professors too living on campus. And they produce a stream of highly educated people who help to set professional standards. “They are a class apart, like Oxford and Cambridge,” says P.V. Indiresan, an expert on universities.

These elite institutions help to keep India plugged into the global knowledge economy. R.S. Sirohi, the former director of IIT Delhi, explains that he used to give his staff long sabbaticals in western universities, and that about a third of them spend time in America every summer. His institute receives sponsorship for research from multinationals such as Sun Microsystems, Cisco, Volvo and Ford. Granted, the elite institutions produce many people who get brain-drained away, but they also keep many bright people from emigrating, and may even attract émigrés back if India's economy keeps booming. It is accepted wisdom in India that the brightest students go to the IITs and the second-best to American universities.

...In higher education, as in so much else, China is visibly pulling ahead of India. The Chinese are engaged in the biggest university expansion in history. In the 1980s, only 2-3% of school-leavers went to university. In 2003, the figure was 17%. The watershed year was 1999, when the number of students enrolled jumped by almost half. The expansion at the doctoral level is even faster than for undergraduates: in 1999-2003, nearly 12 times as many doctorates were awarded as in 1982-89 (see chart 4). And there is more to come: the number of new doctoral students jumped from 14,500 in 1998 to 48,700 in 2003.

The Chinese are determined to create a super-league of universities to rival the best in the world. The central government is investing heavily in chosen universities, such as Peking, Tsinghua and Fudan, offering higher salaries and more research funding. The state governments are doing likewise. It is no accident that the most widely used annual ranking of the world's research universities, the Shanghai index, is produced by a Chinese university.

What lies behind all this is a gigantic exercise in technology transfer. The Chinese are trying to recreate the best western universities at home in order to compete in more sophisticated industries. They have stocked up with foreign PhDs: in some departments of the University of Peking, a third of the faculty members have American doctorates. They are using joint ventures with foreign universities in much the same way as Chinese companies use joint ventures with foreign companies.

The Chinese have no qualms about using market mechanisms to achieve this technology transfer. Tuition charges now make up 26% of the earnings of public universities, nearly twice the level in 1998; many professors are paid according to the number of students they attract; and China is creating a parallel system of private universities alongside the public ones. For example, the University of Peking has more applicants than places, so it has created a parallel university that charges higher fees and accepts slightly less able students. Links between universities and industry are commonplace. The majority of doctorates earned in China between 1992 and 2003 were in practical subjects, which attract the brightest students: engineering (38% of the total), natural sciences (22%) and medicine (15%).

But will China achieve its academic ambitions? The trouble is that investment will not do the trick without broader cultural changes. Rui Yang, a professor at Australia's Monash University, points out that academic corruption is rife. The powerful academies that distribute much of the research funding are prey to both political favouritism and lobbying. Plagiarism is commonplace. Many academics use a good part of their research funding for personal rather than academic ends.

...The spectacle of so many bright people from poor countries upping sticks for the rich world raises questions of social justice, in part because they contribute both money and brainpower to their host country while they are studying and in part because so many of them end up staying permanently. Some people see the development as a kind of neo-colonialism of the mind. But there is no guarantee that all these bright people would have prospered if they had stayed at home. The combined net worth of Indian IIT graduates in America is reportedly $30 billion. But would all those brilliant Indians have become so rich if they had stayed in India? “Better brain drain than brain in the drain,” was the much-quoted verdict of the late Rajiv Gandhi, an Indian prime minister.

Perhaps what is going on is not so much a “brain drain” as “brain circulation”. The governments of many developing countries encourage bright students to go abroad, often using scholarships as inducements, as part of a general policy of “capacity-building” so they can plug themselves into the latest thinking in the West.

Few highly skilled migrants cut their links with their home countries completely. Most keep in touch, sending remittances (and, if they are successful, venture capital), circulating ideas and connections, and even returning home as successful entrepreneurs. A growing number of Indian and Chinese students go home after a spell abroad to take advantage of the hot labour markets in Shanghai or Mumbai. And a growing number of expatriate businessmen invest back home.

...World-class universities can also produce outsize economic benefits. The best-known example of this is Stanford, which helped to incubate Google, Yahoo!, Cisco, Sun Microsystems and many other world-changing firms. But there are plenty of others. The University of Texas at Austin has helped to create a high-technology cluster that employs around 100,000 people in some 1,700 companies. In 2000, the eight research universities in Boston provided a $7.4 billion boost to the region's economy, generated 264 new patents and granted 280 licences to private enterprises.

Top universities are a valuable asset in the global war for talent too. America's great research universities enable it to recruit more foreign PhD students than the rest of the OECD put together. And a striking number of these people stay put: in 1998-2001, about two-thirds of foreigners who earned American doctorates in science and engineering said they had “firm plans” to stay, up from 57% in 1994-97.

The benefits of having global universities are now so clear that governments around the world are obsessed with producing “Ivy Leagues”. The British are introducing fees in part because they want their best universities to be able to compete with the best American ones. The German Social Democratic Party—traditionally a bastion of egalitarianism—has produced a plan to create German equivalents of Harvard, Princeton and Stanford. And the Chinese are hard at work trying to build world-class universities. Today “excellence” is taking over from “expansion” as the mantra of higher education.