Last year October I made my first visit to India. I had heard a lot of stories and read numerous articles about the ‘Rise of India’ (Thomas Friedman probably topping the list in terms of optimism). So…I arrived with high expectations. After arriving in Delhi Airport, staying three days in Delhi and travelling two weeks through Rajasthan, I was becoming more and more fascinated and disappointed at the same time.

Of course I hadn’t expected India to have turned in to one big IT science park in just one or two decades (although some publications seem to give that picture). But I had expected India’s optimism, ambition and rupees to have trickled down to other sections of society…at least a little bit. I have not been in the booming cities of Bombay, Bangalore or Chennai, but judging from my experiences from Delhi and Rajasthan, there’s a lot of work to be done, in terms of public facilities, but especially in terms of equality.

Delhi’s airport was in many ways worse of than the smaller regional airports I had just seen while visiting Indonesia and Malaysia the two months before. The roads and other public works were definitely a lot worse. Steve Hamm of Businessweek fears that the lack of investment in public space might hurt India’s progress:

In Businessweeks ‘Covercast‘ Hamm explains why the private sector not investing in India’s public facilities, even though it is dependent on good roads and airports for its own progress. One of the reasons is the bureaucracy in India. Compared for instance to authoritarian China, it’s a lot harder to get things done in democratic India. As a chief executive of Novartis explains:

And obviously, corruption is still a big problem:

But what I’m more troubled with is the trickling down (or better, the lack thereof) of India’s new economic prosperity to other segments of society. The division between India’s new knowledge professionals and India’s poor seems to have created different Indias. In a recent article in Theory and Society(*), Simitha Radakrishnan, a UCLA sociologist, illustrates this:

This dilemma is outstandingly portrayed in a 4 part radio documentary of the BBC’s “The Changing World“. India’s economy is booming. Salaries in the big cities are rising, and consumer spending is exploding. Economic opportunities abound in India – but not for everyone. This documentary series explores the effects globalisation and a decade of economic reforms are having on India. In each of the 4 parts it highlights another aspect of the rise of India:

Part 1 (25:00 ; MP3 10MB)
A new materialism and consumerism is an obvious sign of India ’s growing middle class. The BBC’s George Arney has been visiting India for nearly three decades. He says that India used to spiritually rich, but materially very poor. Now, Arney reports, it’s a very different story.

Part 2 (25:00 ; MP3 10MB)
This part focuses on the Indian state of Bihar. The squalor there is obvious. Bihar is glaringly left out of India ’s economic revolution. The BBC reports from a region known as India ’s Heart of Darkness.

Part 3 (25:00 ; MP3 10MB)
As India’s economy rises, its entertainment industry is also taking off and an urban culture emerges. In this part Arney takes a close-up look at the nation that lies behind the shiny façade of modern India.

Part 4 (25:00 ; MP3 10MB)
The environmental and social costs of India’s rapid expansion.

It’s definitely a revealing documentary, with all 4 parts picturing contemporary India in a lively manner and with all its paradoxes. It contains several observations and interviews that clearly confirm Radakrishnan’s point.

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(*) Smitha Radakrishnan (2007) Rethinking knowledge for development: Transnational knowledge professionals and the “new” India. In: Theory and Society

2006 has been somewhat of a revolutionary year for German higher education. The system where all universities were considered of equal quality and therefore were subjected to equal treatment by the government, experienced quite a stir.

German Minister of Research and Education Annette Schavan announced in October last year that the Ludwig-Maximilian University (Munchen) and the Technical University of Munchen and the University of Karlsruhe became Germany’s first ‘elite universities’. The three institutions are the biggest winners in Germany’s ‘excellence initiative’. This was established to improve the country’s chronically under-funded universities (and its decreasing reputation abroad), by encouraging high level research and competition. The three universities will receive around 120 million euros each in federal and state funds over the next five years.

This week, the finalists for the second round were announced. Being one of the winners is crucial considering that getting designated ‘elite’ will mean enjoying a piece of the 1.9 billion euros pie, made available from 2007 to 2011. This time the result seems less skewed towards technology, and less towards the southern part of Germany than the first round. The finalists include two institutes of higher education in Berlin, the Free University and the Humboldt University. The others are the RWTH Aachen and the universities of Bochum, Freiburg, Gottingen, Heidelberg and Constance.

The final decision on which of these eight will be designated ‘elite’ will be made in October.

Some interesting views from the German academic community on the excellence initiative can be heard in this radio interview (from NPR; 4:26 in english):

Listen to the interview in Windows Media Player

A few interesting articles appeared recently on the availability of talent to support China’s economic growth. Even though China has a vast pool of human resources, the Asia Times warns about China’s impending talent shortage. Firms in the south now complain that they cannot recruit enough cheap factory and manual workers. The market is even tighter for skilled workers. As the economy grows and moves into higher-value-added work, the challenge of attracting and retaining staff is rising with the skill level, as demand outstrips supply.

Only a few of China’s vast number of university graduates are capable of working for a multinational company, and the fast-growing domestic economy absorbs most of those who could. Indeed, China is facing a looming shortage of home-grown talent, with serious implications not only for multinationals now in China, but also for the growing number of Chinese companies with global ambitions.

Despite the apparently vast supply, multinational companies are finding that few graduates have the necessary skills for service occupations. According to the Asia Times this can be related to China’s history, which has left it with some peculiar deficits.

They point to China’s Confucian heritage as one explanation. This heritage which emphasizes rote learning and hierarchy, may partly explain why many graduates, despite good paper qualifications and English-language skills, are often cautious about taking the initiative. Another interesting explanation was given by China’s one-child policy: “Some firms complain that China’s one-child policy has made it harder for them to find natural team players”

The Far Eastern Economic Review has an item on the same topic (subscription required) but this focuses mainly on the role of returning overseas graduates in tackling this problem. The author of the article, David Zweig (a professor at Hong Kong University of Science and Technology), claims that if China hopes to make up for its brain deficit by wooing overseas-educated Chinese, then it is in for an unpleasant surprise.

He provides the data that show that the return of overseas workers and students is growing. This is partly because of various (national and local) government programmes which financially stimulate the return of Chinese professionals. But it is also partly due to the improved political and economic environment in the country.

Zweig then asks: “but what about the quality of the returnees? Has China been successful in attracting the return of its best and brightest?” He states that data do not support this. Rather, the theory is that those returning to China tend to have first been unsuccessful overseas:

Zweig’s own research confirms this:

The Asia Times article is based on a recent article in the McKinsey Quarterly (free registration required) on the looming talent shortage in China. This article again was based on the report ‘The Emerging Global Labor Market’ of the McKinsey Global Institute. Last Year, the McKinsey Quarterly also wrote about India’s looming talent shortage.

IBM’s CEO Samuel J. Palmisano claims that the Multinational Corporation (MNC), one of the primary agents of globalisation, is taking on a new form: The Globally Integrated Enterprise. A post of the Dutch blog Sargasso pointed me to this article in this month’s edition of Foreign Affairs (the article can also be downloaded from the IBM website).

Although international trading enterprises were already in existence in the 17th and 18th century (e.g. the British or the Dutch East India Company), the first international corporations emerged in the mid-nineteenth century. These corporations were mainly based on colonial exploitation and were in the business of importing raw materials and exporting finished products.

According to Palmisano, the phase of the Multinational Corporation began during the First World War. The War and the resulting collapse of the European and US economies caused barriers for the international corporations. Furthermore, protectionist measures and trade barriers spread throughout the Western world during the 20s and 30s. The result? The emergence of MNCs that could, on the one hand, adapt to trade barriers through local production and, on the other, could globalise specific tasks such as R&D and design. These MNCs however, continued to organize production market by market, within the traditional boundaries of the nation-state.

The subsequent emergence of the Globally Integrated Enterprise was caused by a few important changes at the end of the 20th century: the decrease of economic nationalism and the ICT revolution. The latter facilitated global communication and the standardisation of business operations. State borders thus defined less and less the boundaries of corporate thinking or practice and the Globally Integrated Enterprise could integrate production and value delivery worldwide.

Palmisano points to four major challenges that this new form of organisation will pose:

1. This type of enterprise demands high-value skills. Nations and companies alike must invest in better basic educational and training programs.
2. This form of organisation also needs the safeguarding of intellectual property. Because of global integration, intellectual property will become one of the key geopolitical issues of the twenty-first century. On the other hand, regulation should not be so rigid that it poses barriers to interorganisational collaboration, since this is a key feature of contemporary innovation.
3. Enterprises need ways to maintain trust in these increasingly distributed business models. A company’s standards of governance, transparency, privacy, security, and quality need to be maintained even when its products and operations are handled by a dozen organizations in as many countries. This will require new ways of establishing trust, based on shared values that cross borders and formal organizations.
4. Global corporate integration will involve significant changes in organizational culture and many new standards for managing a much more complex marketplace.

…and the new Globally Integrated Enterprise seems to deliver plenty of new research questions for scholars in organisation and managements studies as well…

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.”

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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 OECD:

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.

The Telegraph:

Old Europe ‘being outpaced by Asian higher education’

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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:

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….

Outsourcing has become a well-tried practice in the global economy. Outsourcing manufacturing is a strategy that has become very widespread. Outsourcing services, illustrated by India’s call-centers, is more recent but has become common practice for many western multinationals. Even the more knowledge intensive services like accounting are now often being provided overseas. India currently is even becoming increasingly a recipient of outsourced R&D. Even waste management and recycling is outsourced nowadays.

But this article in Wired Magazine gave me another view on outsourcing, and one that increasingly worried me reading through the article. It is about a new outsourcing boom in South Asia: the outsourcing of drug trials. Drug trials in the West are becoming problematic because less people want to participate in the trials, the amount of drugs to be tested increases and because the trials generally take a long time:

Ofcourse, the trials bring along benefits. Obviously, the hospitals receive resources that they desperately need. Second, it can be a form of knowledge transfer. However, Kalantri (a local doctor involved in one of such trials) clearly points to problems related to corruption and to the naivety of many of the patients (which come predominantly from the poorer segments of society). Another important point is that the medicines tested are not the ones that are most needed in those countries. And if they are needed, they will be unaffordable for those patients.