International Institute
for Educational Planning
N.V. Varghese
Globalization, economic
crisis and national
strategies for higher
education development
R
esearch 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 re
fl
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 rede
fi
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 Of
fi
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, Scienti
fi
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 bene
fi
ciaries of the expansion of higher education, expansion has been uneven
as shown in
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