Globalization, economic crisis and national strategies for higher education development: research papers; Research papers iiep; 2009

Business 
and Economy, Indian Business Industries
, 2008). 
Over a period of time, many developing economies have been increasingly integrated into the 
global production process. There has been a felt need to develop a workforce which meets the 
requirements of global demand. This has been essential to meet international standards and 
quality in production. Many countries, especially the bene
fi
ciaries of the globalization process, 
started re-orienting their education system, particularly higher education, to meet not only national 
requirements, but also those of the global labour market. One indicator of this process is a shift 
in emphasis in university study programmes, from traditional subject areas to engineering, 
management and IT-related areas. Another indicator is the introduction of English language courses. 
Countries have realized the importance of the English language in the globalization context and 
recognize the premium enjoyed by the English language in cross-national transactions. As one of 
the recent OECD reports notes, “English is the premier language of business and professions and 
the only global language of science, research and academic publication” (OECD, 2008: 20). One 
may notice as an indicator of reorienting higher education systems that countries such as China, 
India, Indonesia, the Republic of Korea, Malaysia and many African countries have moved, on the 
one hand, towards expanding higher education and, on the other, towards diversifying the providers 
and programmes of study and towards promoting or introducing English language teaching; this is 
also the case in Francophone African countries. All of these factors have contributed to reorienting 
higher education to meet the skill requirements of the global market, whether located in the same 
country or abroad, and to the globalization of education. 
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3
Globalization and market orientation in higher education
Globalization has changed the purpose and orientation of education in many countries. While 
universities were associated with and seen as an integral part of the national development efforts 
in the past, they are increasingly becoming an integral part of the production of skills for the global 
market. Higher education is becoming an attractive area of investment and the trade in higher 
education brings more pro
fi
t than that in other sectors. As a result, competition has increased 
between providers of education. In the past, competition was, in many countries, between public 
universities, but today the competition is between public and private universities on the one hand, 
and national and trans-national institutions on the other hand. Knowledge and the production of 
knowledge are becoming a contested terrain left open to the market process.
Knowledge is universal, although the institutions producing knowledge, namely universities, are 
very often national. Universities maintain a dual characteristic – international in content and 
discourse, and national in ownership and operation. Internationalization implies the imparting 
of knowledge, skills and values that have universal application. It can imply either cross-border 
activities or changes in the orientation of courses offered in domestic universities, referred to as 
‘internationalization at home’ or ‘campus-based internationalization’ (Knight, 2008). Globalization, 
on the other hand, assumes a blurring of borders and national systems of education (Teichler, 
2004). 
Economic and educational activities have traditionally been dominated by the public sector. 
The expansion of the private sector in economic activities led to the criticism that public-funded 
education did not address the needs of industry and the economy, the argument being that the 
corporate world knows what the market needs are and, 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 
re
fl
ects the paying capacity of households, the supply of educational services re
fl
ects the capacity 
and willingness of public or private agencies to invest in education. Globalization actively promotes 
market ideology as a unifying force, linking economic activities at the national and cross-national 
levels. With globalization, market operations are extended to social sectors and across borders. 
Consequently, education in the context of globalization becomes yet another pro
fi
table venture, 
cultural activities become commercial products, the public is de
fi
ned as a customer, the university 
becomes a provider, and the learner becomes a customer or purchaser of services (Yang, 2005).
Within the education sector, higher education becomes an eligible candidate for incorporation 
into the market framework. Given the role of research and development (R&D), activities in the 
knowledge economy investing in knowledge production (research) became rewarding economic 
activities. Studies (OECD, 2008; Hanson, 2007) show a close association between ‘investment in 
knowledge’ and innovations which improve domestic innovations and economic competitiveness. 
Research and universities became valuable entities to the corporate sector and important agents 
of the globalization of higher education. The research universities of the USA and their doctoral 
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Globalization and market orientation
15
programmes have become a powerful engine for the globalization of higher education (OECD, 
2008). 
The academic prestige and standing of a university are closely linked to its research capacity and 
its credibility. Many students seeking a foreign degree, especially a doctoral degree, would take into 
account these factors when choosing the country and institution where they wish to study. This is 
also a contributory factor in attracting a large number of cross-border students to countries such 
as the USA, which has six of the top ten universities in the world (USDC, 2008). 
International Institute for Educational Planning www.iiep.unesco.org

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4
Globalization of higher education and cross-border mobility
The high demand for highly skilled persons in the developed world has promoted the migration 
of skilled workers from the developing world. When it was found that study programmes were a 
better source for future recruitment of skilled personnel, many countries opted to promote cross-
border education. The fast growth of cross-border student mobility is an indication of this trend. 
Studies show that a majority of those who enter the USA as students would like to stay on after 
completing their studies, and this is an attractive source of skilled personnel. Information on the 
return plans of doctoral graduates in USA universities indicates that nearly 90 per cent of Chinese 
and Indian doctorate students would like to stay in the USA after their studies. The percentage is 
higher among science and technology graduates, given the better employment prospects (Kapur 
and McHale, 2005). This shows that cross-border education is fertile ground for recruiting future 
highly skilled workers in many developed countries (Tremblay, 2002). 
Higher education, in the context of globalization, has become a market-driven activity, and education 
has become a tradable commodity and part of the trade negotiations under the General Agreement 
on Trade in Services (GATS) (Knight, 2002). GATS covers all internationally traded services and 
overall covers 12 different service sectors including education. Within the education sector, GATS 
covers 
fi
ve categories of education services: primary, secondary, higher, adult, and others. 
Cross-border trade in education under the GATS framework takes place in four modes. They are: 
1. Cross-border supply of the service where consumers remain in their country. E-learning-based 
distance education programmes are good examples of this type of cross-border education. 
2. Consumption abroad where the consumers (students) cross the border. This includes full-time 
study for a degree, part of the study at home and the remaining part in a foreign country, and 
exchange and joint degree programmes. 
3. The commercial presence of the provider in another country in the form of branch campuses 
or twinning and franchising arrangements between universities from the developed and 
developing world, but also between universities of the developed world as a whole. 
4. The presence of persons in another country to provide the service. The most visible form of 
this mode is the mobility of professors from one country to another as an employee of a foreign 
university, as part of an academic partnership, or to teach in a branch campus. 
This paper will discuss cross-border education manifested through the mobility of institutions, 
teachers and students (modes 2, 3 and 4) since reliable information on mode 1 is not easily 
available. 
4.1 Cross-border institutional mobility 
Institutional mobility takes place in different forms – through branch campuses, franchising or 
twinning arrangements. A branch campus denotes the delivery of the programme entirely by the 
foreign institution; franchising denotes the in-country delivery by an authorized domestic institution; 
and twinning denotes joint ownership and delivery by institutions in the home country and the host 
country. Although franchising and twinning are less visible than branch campuses, they constitute, 
quantitatively, larger segments of institutional mobility (Martin, 2007).
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Globalization and cross-border mobility
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Universities from Australia, the UK and the USA are more commonly found in other countries. 
Malaysia has, for example, branch campuses from Nottingham University of the UK, and Monash 
University and Curtin University of Australia (Sirat, 2006). As of 2004, China had more than 
700 approved educational institutions having joint programmes with foreign institutions. Many 
of these are from Australia such as the Universities of Queensland and Victoria which run joint 
programmes with Chinese universities (Garrett, 2004).
Cross-border providers from different countries have branch campuses in Singapore. These include 
Johns Hopkins University (USA) University of Chicago (USA), INSEAD (France), and Jiao Tong University 
(China). Bond University and Monash University, both from Australia, and the Business School of 
the Netherlands have branch campuses in several countries of Africa. 
India has several foreign institutions in operation, mainly from the UK and the USA. A study of 
131 foreign-af
fi
liated institutions in India (Bhushan, 2005) showed that 59 were partnered with 
universities in the UK and 66 partnered with universities in the US. In some cases, the same 
institution has tie-ups with more than one foreign institution. For example, the Indian School of 
Business has tie-ups with Kellogg, Wharton and the London School of Business. Several high-
level delegations have visited India to establish branch campuses or collaboration with Indian 
institutions. For example, Professor Rick, President of Universities UK, led a delegation of UK Vice-
Chancellors to India in 2008 to discuss institutional collaboration and student and teacher mobility 
between premier institutions in India and the UK (