Solid Growth, New Challenges

This morning I attended the launch of the World Bank’s East Asia and Pacific Regional Update. For the first time, the launch came directly from Sydney; previously it was launched in Washington and presented in Australia by videoconferencing. This twice yearly snapshot of economic development in East Asia was presented by Jeff Gutman (WB Vice President for East Asia and the Pacific) and Dr Homi Kharas (WB Chief Economist for East Asia and the Pacific). The title was ‘solid growth, new challenges’ and pretty much covered the message: a lot of optimism, but also some challenges (although I wouldn’t call them new). Here are a few highlights.

Economic growth in East Asia and the Pacific (EAP) remains high. Southeast Asian countries show a rather steady growth of 5 to 6%, while China’s growth slowly decreases but remains high at more than 9%. Japan slowly recovers with a growth of 2.8%.

An interesting observation was the increased regionalization in terms of trade. Exports in East Asia were more than before aimed at other EAP countries. Obviously, the expansion of the Chinese market plays a substantial role in this, but also the economic recovery of Japan.

East Asia is also slowly catching up in terms of patents. The amount of patents in EAP is high for countries like Japan, Singapore, Hong Kong and Korea, even if corrected for income and population. Malaysia and China’s innovation are approximately what could be expected with their level of income. Indonesia, the Philippines and Thailand however, are still underperforming.

One of the challenges ahead was also an important topic in the previous update of November 2005: the avian flu. This problem mainly needs a combination of international and local efforts in order to be contained. Although the economic consequences of an avian flu outbreak could be severe, it “did not keep the World Bank’s Chief Economist awake at night.”

Some extra attention was also given to a more long term threat: global warming. With the rise of China, the CO2 emissions rise accordingly. At the same time, East Asia and the Pacific are very vulnerable to global climate changes, especially since most of their economic activity is in coastal cities.

Interesting quote this morning: “What we worry about most is not having anything to worry about”

The report will soon be available on-line. Audio recordings are available via the University of Sydney Podcasts feed.

Academic Champions League?

In the latest Higher Education section of The Australian it is all about research assessment. The Australian Government has planned to introduce a Research Quality Framework (RQF) which is largely based on the UK Research Assessment Exercise (RAE). The RAE is a peer review exercise to evaluate the quality of research in UK higher education institutions. The introduction of the RAE has improved universities’ research performance (in terms of impact of publications) and created greater research concentration.

It’ s a rather strange moment to introduce the RQF because the UK has plans to abolish the RAE and return to a system that looks more like the current Australian model. In the words of Snitch:

“So Britain is scrapping its research assessment exercise just as Australia prepares to introduce one. What’s more, Britain is returning to a metric system of measuring quality, just like the one Australia uses now.”

One very visible result of the RAE is the concentration of research. Obviously this gives less concerns to Australia’s leading universities (joined in the Group of 8) than to the other players. It’s expected that most of the research funding will be concentrated in these 8 research intensive universities.

Although the framework has not been implemented yet, some of the consequences are already visible in anticipation of the RQF:

“In a significant loss for RMIT University, a leading expert in biomedical sciences has left the campus, taking his entire staff of 15, his laboratory and research grants worth nearly $1 million a year to a research quality framework-free medical institute. As universities prepare for greater competition under the framework, global diabetes specialist Mark Febbraio has announced he will leave RMIT for the Baker Heart Research Institute in Melbourne, blaming the impending introduction of the RQF and its effect on universities outside the Group of Eight.”

Many of the universities outside the group of 8 complain that criteria for societal and economic relevance are missing in the framework, and this will even increase the diversion of funds away from the technological universities to the Group of 8. The concentration of research will likely lead to a ‘bidding war on stars‘. An Australian equivalent of a European Champions League, where the Barcelonas, the Milans, the Arsenals and the Inters will always be in the semi-finals because they can afford to buy the best players?

On the other hand, maybe not:

“The plan to introduce a national assessment system for research quality has stalled after federal Education Minister Julie Bishop announced yesterday she was setting up another advisory group to consider it.”

Higher Education and Europe (again)

Last Wednesday, 1500 students and teachers protested in Brussels against reforms to the Belgian Francophone higher education system. The reforms will restrict the number of foreign students in particular degrees like veterinary science and physiotherapy. Many French students currently study in Belgium because they are required to go through entrance exams in France.

The Times Higher Education Supplement has an article on the issue (subscription required):

The law, due to be introduced in September, is intended to cut the number of non-Belgians accepted on certain courses. In veterinary medicine, 86% of university students enrolled in 2005-06 had completed secondary education outside Belgium, while for physiotherapy the figure was 78%.

The law will set a cap of 30% for non-resident students on courses that had more than 40% foreign enrolment the year before. The cap will apply to chiropody, speech therapy and obstetrics. The Government argues that the influx of non-residents reduces resources per student, causes problems finding external placements and risks reducing the number of professionals who remain in Belgium.

Student groups and academic unions continue to mount demonstrations. Students have been particularly vocal, complaining that the measure is against the spirit of open access and mobility promoted by the Bologna Process. The Government disagrees, pointing out that 30% is still 12 times the European average for non-resident students.

This case looks a lot like the Europeanisation by stealth in Austria on which I posted in this blog in February. In Austria the case was about medicine and German students. In order to avoid an influx of foreign students to study medicine in Austria, the ministry established special requirements for foreign EU students. These requirements however were illegal according to an ECJ court ruling because this was seen as discrimination on the basis of nationality and contradictory to Article 12 of the Treaty, the non-discrimination principle.

My (limited) knowledge of European law therefore says that the Belgian reform will not be allowed by the European Court of Justice. Instead of referring to the (intergovernmental) Bologna Process, the students might better call upon the (supranational) EU Treaties.

Camping for Belarus

The Dutch higher education and science magazine ‘Scienceguide‘ has kept a close watch on the developments in Belarus and on the student/youth movement ‘Zubr‘ (Bison) in particular. In the wake of the elections, several students were arrested for opposing the government. After almost a week on the Kastrychnitskaya Square, protesters have been brutally removed from the square on Thursday.

Members of the European Parliament have posed questions for Brussels about the violent actions of the Lukashenko regime. Until now, the EU has not acted very convincingly on the issue and Zubr reports on several violations by the regime in the last days.

More bottom-up actions are emerging in Europe. Yesterday, Danish protesters have set up a tent camp at the Russian Embassy. The tents were set up in solidarity with the defenders of the tent camp on the Kastrychnitskaya Square of Minsk. The demonstrators protest against the actions of the Russian government, which continues to support the Lukashenko regime.

Scienceguide also has a call for Dutch support for the Belarus protesters:

Today (25 March) 12 o’clock there will be a demonstration for solidarity with the ‘Denim-revolution’ in Belarus on the Museum Square in Amsterdam. This day also happens to be the former ‘Day of Freedom’ holiday in Belarus before the Lukashenko regime abolished this holliday. The activities are organised by student and youth organisations. More information can be found at

Update: an eyewitness account on the developments prior to the crackdown on October square can be found here.

Dutch Arrogance?

Although this week the US and the UK reported that their numbers of foreign students were increasing again, the Dutch Immigration Office says that the number of granted student visas has decreased from 8800 in 2002 to 5900 in 2004.
Part of this decrease is due to the EU enlargement since students from Central and Eastern Europe don’t have to report to the Immigration Office anymore. The number of students from China and Morocco decreased by one third while for some other countries like South Africa, Iran and Ghana the number decreased by 50%.

The Nuffic (the Netherlands organization for international cooperation in higher education) claims that getting a visa can take up to 8 months. In addition, the visas are amongst the most expensive in Europe. The Dutch Association of Universities wants the regulations to become more flexible: “if we continue like this, the flow of students and researchers will slowly come to a stop”.
The Minister for Higher Education has an other view on things:

“In the past there were Chinese students that applied here while they could hardly speak English. It’s not our goal to attract as many foreign students as possible, but that we attract the best”

The Dutch higher education system is of good quality, but thinking that the best students from all over the world will come to the Netherlands at any cost might just be a bit arrogant. If bright students think of applying in the Netherlands, you better make the process as flexible as possible. The best students got plenty of other options!

Update: in response to the Volkskrant article, the Immigration Office reports on its website that applications for student visas increased again in 2005 to 6527. It also claims that the process of obtaining a visa was shortened in the past year.

Chirac: "Adieu"

From the Financial Times:

Jacques Chirac, French president, on Thursday night stormed out of a European Union summit after a French industrialist began addressing leaders of the bloc in English.

Mr Chirac and two senior ministers walked out in protest at the decision of Ernest-Antoine Seilliere, head of the Unice employers organisation, to make a plea for economic reform in ‘the language of business’.

Symbolic for the troubled times in the EU?

Giddens & Co. on Europe

The Guardian published the transcript of an interview with Anthony Giddens about New Labour, the Lisbon Agenda and labour market reforms. The message for Europe, or better, for Germany, Italy and France: a flexicurity model. Reform of the labour market and at the same time taking care of those who lose out. Here are a few of his statements.
About Lisbon and the European Social Model:

You get all these detailed prescriptions about what should be done at the level of the economy. Even this great hit list which countries are supposed to follow. But most of the material on so called social exclusion and so forth tends to be very vague, that goes along with it. So I tend to think there should be more detailed programmes for how you cope with, for example, dislocation of workers who lose their jobs as a result of technological change and changing patterns of social justice.

About the big three (France, Italy, Germany):

The key issue is: is there enough shock in France and Germany and Italy to produce those changes because a great deal of Europe’s unemployment is concentrated in those three countries?

On the Lisbon Future:

Hopefully a hardened version of the Lisbon agenda, some policy innovations like the European Institute of Technology and hopefully more concession to the idea that you need to show that we are doing something to help those who lose from these changes. That is what feel to be a fundamental thing missing from the Lisbon agenda.

Giddens was interviewed on the occasion of the presentation of a pamphlet on the European Social Model. This pamphlet is a collection of papers of a group of European academics and the product of several discussions initiated by the Policy Network in July 2005. In October 2005, an ‘Open Letter on the Future of Europe‘, co-written by Anthony Giddens and Ulrich Beck, has been published in newspapers across Europe in order to stimulate a debate on the future of the European social model.
The papers will be published later this year but can also be found at 10 Downing Street (see discussion papers).

Overseas Students Returning?

The talk about crisis in international student numbers in the UK and the US six months ago, may have been al little premature. The UK and the US are the major destinations for overseas students but due to stricter visa regulations after 9/11 and the London Bombings, the number of foreign students were dropping. Australia remained a popular destination and continental Europe slightly increased its position.

The NYT and the Guardian now report that the students are slowly returning. British universities recruited 6% more students from outside the UK last year. Although good news for university bank balances, the rate of increase slowed compared to the previous year. China still supplies by a large margin the biggest group of overseas students – including postgraduates – followed by India, the United States, Malaysia and Hong Kong.

A survey in the US found that the number of students applying for graduate programmes increased from 11% from the year before. Despite the increase, the number of applications remained lower than in the years before 2003. The number of foreign students applying declined by 28 percent in 2003-4, a previous survey showed, and by an additional 5 percent in the following academic year.

The Economics of Selective Knowledge


In a landmark study, OECD education expert details poor performance of European education. Europe risks falling further behind in 21st century economic race unless it manages to make skills and knowledge a top priority.

The economics of knowledge: Why education is key to Europe’s success. In a study released by the Lisbon Council, OECD education expert Andreas Schleicher shows that educational progress in Europe is lagging behind, in terms of the quality and quantity of its graduates, in openness of its education systems to students from all social backgrounds and in the availability of continuing education and training to those who need it most.

Europe’s skills fall behind Asia.

Old Europe ‘being outpaced by Asian higher education’


This ‘landmark’ study offers no more than a collection of graphs and some comments that, in many cases, are not at all based on the graphs. The reason why the Lisbon Council calls it a landmark study is probably because the outcomes are directly in line with their goals (many of which I agree with) and because they commissioned the study. It is not that I don’t agree with the recommendations, it is not that I ignore the problems.

It is the way in which the recommendations and conclusions lack support, the way in which statistics are used selectively, the way in which glossy policy briefs are presented as landmark studies and the way in which they are reported in the media. And then there’s something that I noted before here and here: the way in which Europe can always be used to support your arguments by just cherry-picking the country that fits that argument.

Let’s go through the report step by step and do some selective nitpicking.

The report starts of with its main conclusion and some key recommendations. In the end I’ll come back to the recommendations, but the main conclusion is: education pays off, always! Not true. Education also has a point where the benefits are optimal and there after its marginal benefit will decrease (for more myths on education and economic growth see: Does Education Matter, Alison Wolf, 2002).

Then the report tries to make a point for higher education as a private investment. In Fig. 1, it is claimed that investment in education gives higher return rates than real interest rates. Basically this translates to: it’s better to go to school than to put your money in the bank. Fine.., but nor very useful. However, the graph also shows that the private rate of return is a lot higher in the US (I guess because of bigger income inequalities) and therefore the graph makes a good case for private investment (meaning tuition fees) for the US and the UK, but less so for other countries.

Fig. 2 shows that if you are better educated, you will earn more. That obviously is the case everywhere. However, it is highest in Hungary, the UK, the US and Korea and the pattern tells more about the differences in income inequalities than about differences in education. More education pays of, especially for Hungarian males! The most interesting observations in the table is probably the fact that female Korean university graduates earn around 2.5 times more than their male colleagues. And in the UK they earn about a quarter more than their male colleagues.

Somehow, Fig. 3 & 4 show that “Countries that give individuals one additional year of education can boost productivity and raise economic output by 3% to 6% over time” (p.4) (although I can’t really see how the graphs support that). Table 3 basically says that a decrease in unemployment and an increase in productivity will lead to a higher GDP per capita. Not really rocket science. Table 4 however is supposed to show us that education drives labour productivity. If that were the case, the red parts in the graph would gradually increase together with labour productivity. As we can see, the growth in the level of education seems to show no relation at all with labour productivity!! And I wonder how the annual percentage change in the level of education is measured anyway. In addition, the data for both graphs are from 1990-2000, the pre-Lisbon era.

Then we move to the issue of access and participation. This has increased everywhere, but not in the same way. The first point that is made is about the remarkable progress of Korea and how it climbed from rank 21 to 3, in terms of the proportion of the population with tertiary education. This remarkable growth, as is shown in this graph, can be mainly attributed to the policies in the 1980s. Countries like Spain, Portugal and Ireland also made significant progress, the report says. Obviously these countries were clearly lagging behind many other OECD countries in the 60s and needed to catch up.

Then the report continues: “most of Europe’s major economies, including France Italy and the UK, only held their ground or, in the case of Germany, significantly fell.” This is true for the whole post-war era. On the other hand, and the report does not mention that, this graph shows that there was a considerable growth in people with tertiary degrees in the 1990s in Norway, Sweden, the Netherlands, the UK, Finland, Poland, France, Ireland, Spain, Belgium, Turkey and Portugal.

Then there’s quality. On the basis of the Shanghai Jiao Tong Ranking of universities (that only featured 2 European universities in the top 20), the report concludes that Europe “is running behind in the quality of the graduates it produces”. A slightly bold conclusion from a ranking in which quality of education (measured in the amount of Nobel Prize and Field Medal winners among their alumni!) counts for only 10% of the total score. If we look only at the quality of the graduates, there would be 5 European universities in the top 20, instead of 2. And besides, the report does not mention that the ‘Korean miracle’ is not present at all in the top 100 of the ranking.

After praising American higher education the report switches to secondary education: “the results are not much more encouraging”. On the basis of the OECD PISA (Programme for International Student Assessment) data, it concludes that “students in very few of Europe’s most important countries performed much above the OECD average and many performed below it.” Pretty vague statement. Since we were comparing with the US anyway, let me rephrase that somewhat differently (as shown here for the case of math skills): “students in 18 European countries performed above the US average and four performed below”. And that while it spends so much more on education. It’s not my intention here to criticize American education, I just try to make clear how statistics are used selectively.

And then it’s time for the public-private debate. I already pointed to the fact that the private rates of return of tertiary education are higher in the US than in many other countries and that that could justify the fact that there is more private spending in the US, as this graph shows. A better reflection of public-private benefits in the funding of European higher education can be justified in my opinion. There are several studies, like this dissertation, that support that, but there is no way that you can support that on the basis of this data!

After a story on ‘what is so great about Finland’ the report continues with access and participation in relation to social backgrounds. The point here is that the US, Australia, Japan and Korea have improved access in higher education by letting students pay for their education. “Most (?) continental European countries are holding back their universities by neither making the public investment nor charging tuition fees”. However, other OECD data shows that such an increase in participation has also taken place in predominantly publicly funded education in countries like Sweden, Norway, Finland and Iceland.

With regard to the issue of equity versus school autonomy, the report shows this table. Finland supposedly steers on outcomes: teachers and schools have a lot of freedom in what they teach and how they teach, as long as the results are ok. Other countries, on the left side of the graph, want to guarantee that everyone gets an equal education. However, the result of the latter strategy is that kids from ‘better’ social backgrounds are more likely to enter universities and therefore it increases inequality. There is a logic in this kind of reasoning. However, considering that all Nordic countries are concentrated at the right side of the graph, it might also (or additionally) be that equity is enhanced by a high degree of public funding of the education system. After all, this way there is no reason for richer students to get better quality education than poor background students. I think that here the report again fails to present a complete picture.

Another interesting passage is the following about social mobility: “Here lies perhaps the biggest disappointment in Europe’s education systems. Many of them make ambitious claims when it comes to securing equity in learning opportunities. But the OECD’s PISA study reveals that social background plays a larger role in determining a student’s performance in countries such as Germany, France and Italy than in the U.S. (..) In many countries, the data suggest that European schools reinforce existing socio-economic inequities.” In a report full of tables and graphs, I would have loved to see one on this data! If we look for instance to a study by the Education Policy Institute (p.40) that also looked at the relation of social background and participation in higher education, we can see in this table that it is at least not correct to talk about ‘Europe’ in this sense.

An interesting point however (but again no data) is that participation seems to decrease if student pathways are established early in the educational career. In Germany for instance, kids are divided for the academic or vocational track already at the age of 10. In Dutch education, I had to make those choices at the age of 12.

Finally then, there is continuing education. Europe underperforms here as well, although again, Denmark, Sweden and Finland are doing well, especially for the groups that need it most. In the US, the continuing education market is also large, but there the lower level segment only accounts for a small part.

Having gone through the report, let’s have a look at the recommendations:

1) Create and maintain a system of diverse, sustainable and high-quality educational institutions with the freedom to respond to demand and accountable for the outcomes they produce

2) Ensure that the growth and development of tertiary educational systems are managed to improve access, raise quality and enhance equity

3) Implement financing and student-support policies which mobilize public and private funding in ways that better reflect the social and private benefits of tertiary education

4) Encourage universities to evolve so that their leadership and strategic management capacity matches that of modern enterprises, with appropriate strategic, financial and human resource techniques to ensure long-term financial sustainability and accountability requirements, and

5) Ensure that universities are governed by bodies that reflect a much wider range of stakeholder interests than the academic community

Only the second and third recommendation can be directly related to the report, although no data was presented on these issues. The other three might be useful but seem to come out of the blue. I repeat that I don’t necessarily disagree with the recommendations and that I don’t ignore the problems (like some politicians do). But I don’t think that the ends always justify the means….

So that’s Nanotechnology

Nanotechnology is right up there in the technology hypes, next to biotechnology and information technology (or are we passed that?). Reading this post on your laptop or PC, the results of information technology are hard to ignore. The results from research in biotechnology are maybe harder to grasp, but still pretty obvious (medical applications, food, agriculture). But nanotechnology?

Time for some nanotechnology 101:

Nanotechnology is the art and science of manipulating matter at the nanoscale (down to 1/100,000 the width of a human hair) to create new and unique materials and products. An estimated global research and development investment of nearly $9 billion per year is anticipated to lead to new medical treatments and tools; more efficient energy production, storage and transmission; better access to clean water; more effective pollution reduction and prevention; and stronger, lighter materials. And these are just a few of the more significant ways in which people are discussing using the technology.

If that didn’t help: Promotheus‘ weblog had a post on the release by Woodrow Wilson Center’s Project on Emerging Nanotechnologies of an inventory of 200 existing consumer products that claim to incorporate nanotechnology. From chocolate to processors, from sunscreen to washing machines. Click on the picture or go to this BBC-site for the nanotech future. Ever wondered why the iPod Nano is called the iPod Nano?