The sea is dangerous and its storms terrible, but these obstacles have never been sufficient reason to remain ashore.
Ferdinand Magellan (1520)
For several decades, traditional human capital analysis challenged the need for public support of higher education on the grounds that graduates captured important private benefits—notably higher salaries and lower unemployment—that should not be subsidized by taxpayers. Many multilateral and bilateral donor agencies, influenced by this argument, focused their support on basic education rather than investing in the expansion and improvement of higher education systems in developing countries.
In the 1990s, however, a growing body of research demonstrated the need to go beyond rate-of-return analysis to measure the value of higher education as an important pillar of sustainable development. By focusing primarily on the private returns of government spending, rate-of-return analysis fails to capture broad social benefits accruing to society, that are important to recognize and measure. These include research externalities, entrepreneurship, job creation, good economic and political governance, and the positive effects that a highly educated cadre of workers has on a nation’s health and social fabric.
Building on these findings, the path breaking 2000 report entitled Higher Education in Developing Countries: Peril and Promise called for scaling up investment in higher education and research, as a key pillar to equip developing countries with the knowledge and qualified manpower needed to fight poverty and accelerate economic growth. Written by a distinguished group of independent experts with financial support from several donor agencies, the report had important impact at three levels. First, it helped turn around donor policies in favor of greater attention to higher education in partner countries. Second, it unleashed many positive reform initiatives in the developing countries themselves. Third, it paved the way for increased South-South networking and collaborative activities.
Almost fifteen years later, the world of higher education has changed significantly. Developing countries have seen tremendous enrollment growth, especially in the private sector. In Europe, the Bologna process has led to the creation of a “higher education space” facilitating the circulation of students and academics. Asian nations have been at the forefront of efforts to place higher education at the center of their economic development strategies.
Higher education finds itself at another crossroad today, as national systems seem to be pulled in several directions by a combination of factors bringing about both opportunities and challenges at the same time. The forces exercising new pressures on higher education can be divided into three groups: crisis factors, stimulation factors, and rupture factors.
The crisis factors are the direct results of the economic and financial crisis that started in 2008. Many governments have significantly cut their higher education budget while, at the same time, households have fewer resources to allocate to education expenditures. Furthermore, in many countries, the slowing down of the economy has led to rising graduate unemployment.
Compounding these elements of crisis are rupture factors such as those pointed out in a 2013 report proposing the image of “an avalanche” to describe the radical changes affecting how higher education institutions will be conducting their teaching and research activities in the future. Among these rupture factors are technological innovations such as flipped classrooms and other strategies for more interactive learning, mass online open courses (MOOCS) reaching hundred of thousands of students all over the world, increased competition from for-profit and corporate universities that provide professional qualifications closely linked to labor market needs, and new accountability modalities like the global rankings, that allow for different kinds of comparisons of the performance of universities across all continents.
Finally, higher education institutions are exposed to stimulation factors in the few countries that, notwithstanding the financial crisis, have continued to give priority to the development of their knowledge economy by protecting their higher education budget and, in some cases, launching “excellence initiatives” bringing a large influx of additional resources to their leading universities.
How these three sets of factors play out in each country determines the new “perils” and “promises” likely to shape the development of higher education in the years to come.
This article was first published in the Bulletin (Issue 182, July 2014), the magazine of the Association of Commonwealth Universities (ACU).