Profound changes are taking place in global higher education. Leading universities in the developed world are being buffeted by tightening constraints on public funding and a slump in endowment income. In the developing world ─ for many years the source of mobile international students seeking university places in the advanced English-speaking countries ─ a major expansion in domestic higher education is underway. Everywhere, many governments have aggressive plans to expand higher education and attract foreign students. International league tables and the relentless spread of English as a medium of instruction are making the sector ever more competitive. Private sector universities are spreading across the world, as governments and students seek cheaper or more innovative alternatives to traditional public universities. This lecture explores the changing landscape of international higher education and asks: why should we care about the ‘great brain race’?

1. The changing landscape of global
higher education: why should we care
about the “Great Brain Race”?
Nigel Healey, 2 May 2012

2. Prologue
24 May 2012 2

3. Overview
• The institution of universities
• The growth of higher education: public benefits vs private
gains
• The globalisation of higher education: the “Great Brain Race”
• Emerging trends in global higher education
• The future of UK universities
• Conclusions
24 May 2012 3

4. The institution of universities
24 May 2012 4

5. Even new universities look old…
The University of Chester is one of the
oldest English higher education
establishments of any kind.*
24 May 2012 * http://www.chester.ac.uk/about/the-university/history 5

6. The expansion of UK higher education
24 May 2012 Source: Robertson (2010) 6

7. A global phenomenon: percentage of
population with tertiary education by age
24 May 2012 Source: OECD Education at a glance 2011 7

8. The drivers of higher education expansion
• Public policy
– social benefits of higher education
– role of higher education in driving growth in a knowledge economy
• The private returns on a higher education in a knowledge
economy
24 May 2012 8

9. Public policy I: spillover benefits of higher
education
• Wide range of social benefits from graduates for
productivity, health status, crime, civic engagement,
social cohesion
• OECD estimates of tertiary education vs upper
secondary education for:
Electoral participation 11.7%
Volunteering 6.90%
Life satisfaction 11.20%
24 May 2012 Source: OECD Education at a glance 2011 9

10. Public policy II: higher education and the
knowledge economy
• “the knowledge economy is one in which the generation and
exploitation of knowledge has come to play the predominant
part in the creation of wealth” (DTI Competitiveness White Paper
1998)
• “economic success is increasingly based on upon the effective
utilisation of intangible assets such as knowledge, skills and
innovative potential as the key resource for competitive
advantage” (ESRC, 2005)
• “Thinking for a living”: the knowledge worker is at the heart of
the knowledge economy
• Knowledge economy magnifies the spillovers of having an
educated workforce: positive feedback loops
24 May 2012 10

11. Higher education and economic development
in action
Per capita GDP US$
2005 prices
24 May 2012 Source: Penn World Tables 6.3 11

12. Percentage of the population with tertiary
education by age group revisited
Brazil
Korea
24 May 2012 12
Source: OECD Education at a glance 2011

13. Korea’s top brands WUR QS Top 400 Universities
and universities
42 Seoul National University
90 KAIST
98 Pohang University of Science
and Technology (POSTECH)
129 Yonsei University
190 Korea University
245 Kyung Hee University
259 Sungkyunkwan University
(SKKU)
314 Hanyang University
344 Ewha Womans University
392 Sogang University
24 May 2012 Source: QS World University Rankings 2011/12 13

14. Brazil’s top brands WUR QS Top 400 Universities
and universities
169 Universidade de São Paulo
235 Universidade Estadual de
Campinas (Unicamp)
381 Universidade Federal do Rio de
Janeiro
24 May 2012 Source: QS World University Rankings 2011/12 14

15. UNESCO’s world view
• “At no time in human history was the welfare of nations so
closely linked to the quality and outreach of their higher
education systems and institutions.” (World Conference on
Higher Education Partners, June 2003
• Public policy prescription: subsidise higher education to
increase overall take-up and increase access for
disadvantaged groups
• Public subsidies being reined back in many countries, but
market continues to grow because private benefits are so
high
24 May 2012 15

16. The private gains from education
•Employment
•Lifetime earnings
•Health status
•Happiness
24 May 2012 16

17. Percentage of 24-65 year olds in
employment by level of education, 2009
24 May 2012 Source: OECD Education at a glance 2011 17

18. Private rate of return on higher education,
2009
24 May 2012 Source: OECD Education at a glance 2011 18

19. 24 May 2012 Source: OECD Education at a glance 2011 19

20. Q: Where can I work without a degree?
24 May 2012 20

21. A: McDonalds
24 May 2012 21

22. It all adds up to a growing market
300
250
200
Millions
150
100
50
0
2000 2005 2010 2015 2020 2025
24 May 2012 Source: IDP 22

23. The globalisation of higher education
• As higher education has
expanded, it has also globalised
• Increasing numbers of students
study outside their home country
or with foreign providers
• Universities compete globally for
students (and faculty): the “Great
Brain Race”
• Many of the drivers are the same
as for global business
24 May 2012 23

24. Number of students studying outside their
own country
24 May 2012 Source: OECD Education at a glance 2011 24

25. National market shares (2009)
24 May 2012 Source: OECD Education at a glance 2011 25

26. International enrolments as a percentage of
total (2009)
24 May 2012 Source: OECD Education at a glance 2011 26

27. Stocktake
• Higher education has expanded everywhere since 1960 and will
continue to grow rapidly
• The expansion has been driven by public policy and the high private
returns to higher education
• Higher education has also globalised, with the UK one of the market
leaders in “export education”
• Should we be optimistic? How will we fare in the next leg of the
“Great Brain Race”
• Five key developments in the global market:
Consumers Demographics Technology
Asia Private
competitors
24 May 2012 27

28. 1. Consumers
• University and b-school league tables
originated in the US
24 May 2012 28

29. Rankings spread to the UK and then globally
•UK league tables
•Global league tables
•20,639 universities world-wide
24 May 2012 29

30. versus
THE World University Rankings 2011/12 QS World University Rankings 2011/12
1. California Institute of Technology University of Cambridge
2. Harvard University Harvard University
3. Stanford University Massachusetts Institute of Technology (MIT)
4. University of Oxford Yale University
5. Princeton University University of Oxford
6. University of Cambridge Imperial College London
7. Massachusetts Institute of Technology (MIT) UCL (University College London)
8. Imperial College London University of Chicago
9. University of Chicago University of Pennsylvania
10. University of California Berkeley Columbia University
24 May 2012 30

31. Webometrics world university ranking
University of
20369 Medical Sciences &
Technology
24 May 2012 31

32. University of Nottingham
24 May 2012 32

33. Victims of league tables
Prof Datuk Dr. Hashim Yaacob should resign as University of Malaya Vice
Chancellor not only for the shocking 80-place plunge of the nation’s
premier university from 89th to 169th position in the QS-THES World
University Ranking for Top 200 Universities 2005, but for his disgusting
complacency when he could say that he was “not worried”*
24 May 2012 * Education in Malaysia, 30 October , 2005 33

34. 2. Asia
• Asia is the fastest growing, most
populous continent
• All Asian countries are making
major investments in both public
and private universities
• These developments are having
multiple impacts on universities in
the UK
24 May 2012 34

35. Asian government policy on export education
• China: 500,000 international students by 2020, (250,000 in
2012) and above numbers sent abroad
• Singapore (Global Schoolhouse): 150,000 international
students by 2015 (80,000 in 2012)
• Malaysia: 150,000 international students by 2015 (70,000 in
2012)
• South Korea: 100,000 international students by 2012
• Taiwan: 95,000 international students by 2014
24 May 2012 35

36. The changing global division of labour
1980s
1990s
24 May 2012 36

37. Student World Fair
• Asian universities are not only retaining more of their own students
and competing for international students in third markets
• As the tuition fees for domestic students in the UK rises, they are
also competing for UK students
• Student World Fair: Hong Kong Poly U (QS WUR #177)
• Hong Kong University (QS WUR #22)
24 May 2012 37

38. And Asian universities increasingly
competing for the top faculty…
Estab. 2000
Professor Arnoud De
Meyer, President
Professor Howard Thomas
Dean, Lee Kong Chian
School of Business
24 May 2012 38

39. Victims of Asian competition
24 May 2012 39

40. 3. Demographics
in 2000 in 2050
UNITED KINGDOM
MEN WOMEN
85+
80 - 84
75 - 79
70 - 74
65 - 69
60 - 64
55 - 59
50 - 54
45 - 49
40 - 44
35 - 39
30 - 34
25 - 29
20 - 24
15 - 19
10 - 14
5-9
0-4
,10 ,8 ,6 ,4 ,2 ,0 ,0 ,2 ,4 ,6 ,8 ,10
24 May 2012 40
Source: OECD

41. Could be worse…
in 2000 in 2050
ITALY
MEN WOMEN
85+
80 - 84
75 - 79
70 - 74
65 - 69
60 - 64
55 - 59
50 - 54
45 - 49
40 - 44
35 - 39
30 - 34
25 - 29
20 - 24
15 - 19
10 - 14
5-9
0-4
,10 ,8 ,6 ,4 ,2 ,0 ,0 ,2 ,4 ,6 ,8 ,10
24 May 2012 41
Source: OECD

42. India’s population pyramid in 2000
24 May 2012 42
Source: US Census Bureau

43. …and India in 2050
24 May 2012 43
Source: US Census Bureau

44. Victims of demographics
24 May 2012 44

45. 4. Private competitors
• Private (not-for-profit) higher education is a major part of
higher education worldwide
• The new wave is for-profit private providers which are
seeking to expand market share
• Teaching-focused, very cost competitive, market-focused
24 May 2012 45

46. Leading private universities
• United States: Harvard University, Columbia University,
Stanford University, Yale University, Massachusetts Institute
of Technology, Rice University
• Japan: Waseda University, Keio University
• Korea: Yonsei University, Hanyang University, Korea
University , Pohang University of Science and Technology
(POSTECH), Sungkungkwan University (SKKU)
• China: University of Nottingham Ningbo, China (UNNC), Xi'an
Jiaotong-Liverpool University
24 May 2012 46

47. …and the new kids on the block
Laureate International
Universities
24 May 2012 47

48. Watch out for the new “corporate universities”
• Global Council of Corporate Universities
– 4,000 members
– 4m students
• Hamburger University, estab. 1961
• Huawei University, Beijing
• Infosys Global Education Center, Delhi
24 May 2012 48

49. Victims of new, more aggressive competitors
24 May 2012 49

50. The changing global higher education:
disruptive online technologies
• CAL is at least 30 years old
• Most universities have not only failed to exploit digital
technologies…
• …they have actually harnessed them to become less cost-
effective
• Some of the for-profit providers (and innovative public
universities like the OU) are succeeding with on-line provision
• But real growth is in the 2.0 world
24 May 2012 50

51. Free lectures: “Financial Markets” by Robert
Shiller of Yale University
24 May 2012 51

52. Khan Academy
24 May 2012 52

53. The changing global higher education:
disruptive online technologies (cont’d)
• League tables, the growth of higher education in Asia and
private providers all pose threats to MEDSC public
universities
• Disruptive technologies are more difficult to manage because
they are harder to foresee
• Could public universities go the way of Borders?
24 May 2012 53

54. Victims of disruptive technologies
Not a victim
24 May 2012 54

55. The future of public universities?
Competition Competition
from new Demographics from new
conventional innovative
providers providers
Traditional
Fiscal public Social
universities
stress inclusion
League Disruptive
tables / Climate technologies
consumer
activism
change
24 May 2012 55

56. Jamil Salmi’s future university
• It will be compulsory to go to university
• Students will be recruited through Facebook
• Financial aid will be auctioned on eBay
• Bachelors' degrees will only be valid for five years
• There will be an 0800 number to Bangalore for online tutoring
• Graduates unemployed after six months will get a tuition fee rebate
• Public universities will get 10% of their income from governments
• Vice Chancellors’ salaries will be linked to their university’s ranking
• All tuition will be in English, everywhere
• The most prestigious professional degree will be an MFA not an MBA
24 May 2012 56

57. The end of the UK public university?
• “Thirty years from now the big
university campuses will be relics…
I consider the American research
university of the past 40 years to
be a failure” Peter Drucker (1997),
Forbes Magazine
• “No parent who sends an ill-
disciplined, rebellious child away to
university and welcomes home a
confident, personable and
employable graduate doubts the
value of university” Anonymous
24 May 2012 57

58. A guide to university survival
• Be clear what the university is for: what is your mission?
• Focus energy and resources on pursuing that mission and
shake off historical prejudices and convention
• Don’t invest in doing for students what they can access more
cheaply or freely externally
• Do invest in doing what students can’t get through a
broadband connection
• Accept that the half-life of technical knowledge is shortening
and that, in knowledge economy, the most valued capability
is creativity
24 May 2012 58

59. Conclusions
• “Professors reminisce about an age when public money was
plentiful, governments left them alone and academics were
part of the ruling class…..Students remember when the
government picked up the tab for tuition and living costs”
The Economist
• “There are three kinds of companies: those who make things
happen, those who watch things happen and those who
wonder what’s happened” Anonymous
• “There are two kinds of companies: those who change and
those who disappear” Philip Kotler
24 May 2012 59

60. 24 May 2012 60