UNSW Asia: the conjuncture of events

Fred Hilmer, Vice-Chancellor of the University of New South Wales, looks back on the UNSW Asia debacle. One of the question that I asked in my post immediately after UNSW's announcement was about the real reason for UNSW's sudden departure. Much news has been reported since, but none of the explanations can fully explain it. Hilmer points to the low enrollment numbers as the reason and the fact that the Singapore Economic Development Board wasn't willing to accept their rescue plan.

Today it was also reported that high fees led to the fall of the Singapore Campus. This has been said by many others but it can't be a sufficient reason. Other senior academics at UNSW Asia blamed a lack of marketing for its demise. Sure, this might be part of the explanation as well. Simon Marginson of the University of Melbourne University explained that the business plan was plain bad and based on too rosy a set of enrollment projections.

I think we have to conclude that there is not one single reason for UNSW's pull-out. It is more a concurrence of circumstances that led to a major fiasco. But why hasn't this been foreseen by a big professional organisation like UNSW? Hilmer basically inherited the whole situation and the only thing he could be blamed for is for opening the campus at all at the start of this year. The establishment of the UNSW Asia campus of course goes further back in time. At least until 2003.

It is interesting to see that the whole development of the UNSW Asia idea has coincided with a period of rather instable governance. For a period of ten years the university was under the energetic leadership of John Niland. Niland has a good relation with Singapore and extensive knowledge about the region. He is currently Member of the Board of Trustees of the Singapore Management University. However, keeping in mind that UNSW was only approached by EDB in 2003 to consider setting up a campus in Singapore, it is unlikely that Niland was involved as a VC.

This means that the whole process, from EDB invitation to the closure in May 2007, took place in no more than 4 years. In these 4 years however, the UNSW has had 3 Vice-Chancellors! The first contacts with EDB have been with Rory Hume, now Provost at the University of California. Hume became VC in 2002 and resigned in 2004, because of the way he handled a case of academic misconduct in the university. Hume's successor was Mark Wainwright who held the VC Office from July 2004 until his retirement in June 2006. This must have been the period where the main negotiations with the EDB have taken place and where the plans for the campus were formed. It was under Wainwright that UNSW Asia was officially launched, that Greg Whittred was appointed president of UNSW Asia and two deputy presidents were announced.

So in 2006 Fred Hilmer left his position as CEO of John Fairfax Holdings and became VC of UNSW. When he came into office, UNSW Asia basically was a 'fait accompli'. Hilmer has never been a true believer in the Singapore venture, but he did not really have the option to pull out since all agreements were made and everyone was set to go. The Singaporean Straight Times (26 May, 2007) reported that 'the death knell for the Singapore campus was sounded the very week that Prof Hilmer took over on June 19, 2006'. He pulled out eventually because financial risks would steeply rise with the construction of a city campus in 2008.

A leading actor in the whole saga - and the one that actually signed the MOU with the EDB in April 2004 - is Former Deputy VC for International & Development, John Ingleson. He held this position since 2001 and was also CEO of the international education, training and consultancy arm of UNSW, New South Global. While he was an outspoken advocate of UNSW Asia - and of global academe in general - he seems to be the most silent factor in its aftermath.

Ingleson left UNSW after vice-chancellor Fred Hilmer restructured the university's top level a year ago. He is now Deputy VC I & D at the University of Western Sydney and also member of the Board of Directors of IDP (a company offering student recruiting and testing services and is part-owned by the Australian universities). The same company also undertook a program-level marketing research for UNSW Asia and was the exclusive recruiter of international students for UNSW Asia.

My two cents? A bad business plan, pursued by an over-enthusiastic DVC who overestimated economic opportunities and underestimated risks in the global higher education market. While there were plenty of reasons to slow down the development of UNSW Asia and the individuals pushing it, this never happened because clear and stable leadership at the very top was lacking at that time. By the time Hilmer inherited the situation, it was a done deal. He tried to make a deal with the Singaporeans but they didn't bite. Option 1: run the risk of even higher costs because of the construction of a campus; Option 2: get out, now costs are still bearable. May 23...Press conference...option 2...closed.

Higher Education Funding in Indonesia

The Jakarta Post reported that the Indonesian Director General for Higher Education, Satryo Soemantri Brodjonegoro would increase the subsidies for universities. The government would disburse a Rp 13.5 trillion (US$1.5 billion) fund next year to subsidize costs at state-run and private universities. Good news for Indonesian higher education? Of course, every extra dollar or rupiah is welcome. But...

He admitted that the increase would not cover education costs for university students. "The amount is too small to meet the demands of poor families who want to have access to higher education," he said. In recent years the government has decreased its subsidies for state-run universities and encouraged them to find their own funding sources. As a result, some state-run universities began offering courses for exorbitant fees.

Starting from 2000, Indonesia’s leading four institutions have – in financial terms – basically been privatised. Institut Teknologi Bandung, Institut Pertanian Bogor, Universitas Indonesia and Universitas Gadjah Mada received the so-called BHMN status (Badan Hukum Milik Negara or ‘state owned legal entities’). The other public universities in Indonesia are meant to follow this path in the future. Universitas Sumatera Utara (USU) received the status in 2003, followed by the Universitas Pendidikan Indonesia (UPI) in early 2004. BHMN meant greater autonomy and autonomy was necessary because the universities, under the Suharto regime, suffered from a serious lack of academic freedom. But autonomy did not just mean academic autonomy, it also meant financial autonomy. And this basically translated into budget cuts. These cuts were so severe that some of the universities now only receive about a quarter of their financial means from the government, where it used to be nearly 100%!

The chronic underfunding of Indonesian education was acknowledged by the Megawati regime. At that time the pledge to allocate 20% of the government budget on education was even incorporated in the constitution. But what is going on in reality? As we see below, Indonesia’s spending on education as % of GDP has slowly decreased in the early years of this century. While in 2003, Indonesia spent only 0.9% of its GDP on education, Malaysia spent nearly 8 %!

For all graphs: Red = Indonesia; Blue = Malaysia

So is the 20% objective unreasonable? For sure, the 20% objective is far from achieved in Indonesia. Malaysia however spent even more than 20%, while Indonesia did not even reach 10% (no data for 2000 & 2003). However, there has been some improvement after 2002. For 2006, the expenditure on education is 11.8 % of the budget. Some improvement, but still far from the promised 20%.

For higher education, the situation becomes even more sever if you see that Indonesia spends relatively less of its education money on higher education, compared again with Malaysia. For Malaysia, between 30 and 35% of its education budget went to higher education between 2000 and 2003. For Indonesia that is less than 25%.

What is also interesting to see in this respect is where the money is spent. Below you can see that the majority of Indonesian spending is current expenditure. For Indonesia that is over 80%, of which nearly 100% goes to salaries. For Malaysia current expenditure is around 50% and much less of this goes to salaries. Capital expenditure for Indonesia thus is very low, pointing to a serious underinvestment in Indonesia’s universities.

What has been the result of all this? Basically two things. For Indonesia it has led to rigorous inequality for higher education. In the past decades the government has done a good job in eliminating inequality in elementary education. But if we look at data from Triaswati and Roeslan (2003), presented by Nizam in a recent UNESCO report on Higher Education in Southeast Asia (PDF; 4.6 MB), we can see that inequality increases with the level of education. While 30.9% of the richest quintile receives higher education, of the poorest quintile, only 3.3% is that lucky.

The second result is that the autonomous BHMN universities are becoming ever more entrepreneurial. This in itself is not a problem and it is seen in nearly all countries. The Indonesian BHMN universities have undergone such a drastic change in just a few years but have coped with it relatively well. But they are seriously underfunded, especially if we consider that the demand upon them has grown. Increasingly they are expected to deliver high quality research and, much more than their Malaysian counterparts, rely heavily on the market and the private sector to acquire research funding. Somewhere along the line you will have to ask whether the political domination has been replaced by the domination of the market.

In this light the increase of subsidies can be seen as too little too late. Maybe it is never too late to invest in education, but an increase from 12.9 trillion to 13.5 trillion Rupiahs is definitely too little!

(data for the first four graphs are from the UNESCO education database)

Indonesia Too Democratic?

Can a country be too democratic? Vice President of Indonesia, Jusuf Kalla, thinks it can be. The Jakarta Post reports on his visit to China, and it seems like Kalla is quite impressed by what is going on in China. If only Indonesia was a bit less democratic they would be able to make the same progress as China is making.

"China's strength is that it can plan and implement. Our system, which is too democratic with too much individual freedom that often disregards the rights of others, has made it difficult for us to build infrastructure"

"As long as individual right is above public responsibility, we will not progress... That's the only problem we have now."

A strong government role can help economic development, as is shown by Indonesia's neighbors Singapore and Malaysia. But going the same way as China is simply not an option for Indonesia anymore, after almost 10 years of democracy. And despite all the troubles in its short history of democracy, the country is showing progress. Progress not just in terms of economic development but also in terms of intellectual and artistic freedom. Sure...Indonesians might hit the streets a few times too many, but I guess that's a healthy sign, even though it might not always correspond with the governments plans.

An interesting example is the TV show Newsdotcom, better known as 'Republik Mimpi' or the Republic of Dreams (below is an item on the show by Australian current affairs programme Dateline). It is a show with a healthy dose of political satire, including impersonations of former presidents Gus Dur and Megawatti, the current president Yudhoyono and even Jusuf Kalla. This definitely wasn't imaginable in the Soeharto Era and probably would lead to quite some government opposition in other countries in Southeast Asia. Even though Information and Communication Minister Sofyan Djalil planned to file a legal complaint against the producer, the show has been allowed to continue.



Maybe a small sign of hope amidst the many troubling things happening in Indonesia. Nevertheless, I think it is an important one. And in the long run, such minor steps and a little bit 'too much democracy and individual freedom' can give Indonesia some major advantages compared to (semi-)authoritarian countries.

Malaysia as an Education Hub

The UNSW debacle in Singapore and the exit of Johns Hopkins last year, have dealt a serious blow to the Global Schoolhouse strategy of the Singapore government. Singapore’s neighbor Malaysia announced a similar strategy last year. With this strategy, Malaysia becomes one of the most interesting examples of the way that higher education is globalizing nowadays. A major exporter as well as importer of higher education, with foreign universities within its borders and Malay universities establishing branches outside Malaysia.

First of all, Malaysia has long been sending many of their students and university staff abroad, especially for postgraduate studies, because their own system could not absorb the increase of students in the last decades. In addition, the racial quota for public universities to enroll Malay forced a lot of students from Chinese and Indian backgrounds to pursue their higher education abroad. The last decade has seen a sharp rise in private universities and colleges that have been able to absorb many of these students and the Malay that were not accepted in the public sector. Despite this, the flow of Malaysian students abroad – especially to the English speaking countries – has remained substantial (see table).

Malaysian students abroad 1999-2004

In addition to sending students abroad to pursue their education, the Malaysian government has also admitted higher education institutions into Malaysia in order to meet the increasing demand of higher education in the country. The establishment of such branch campuses has to fulfill a wide range of legal requirement (on ownership issues, but also on the content of education), but this has not kept universities from establishing these branches. The best known examples are Monash University, Curtin and Swinburne from Australia and Nottingham University from the UK. Although these partnerships were usually based on so-called sandwich programmes (where part was done in the home country of the university), they now also offer full degrees in Malaysia.

But in recent years, both the flows of students as well as the flows of institutions are no longer one way but now go both ways. Although public universities in Malaysia do not undertake activities abroad – and probably they are not allowed to – the private ones seem to become more and more active. You can now actually obtain a Malaysian degree in London, offered by the Lim Kok Wing University, well known in Malaysia for its IT and Design programmes. And this university is not just a little office somewhere in London but is established in a beautiful old English building. But Lim Kok Wing did not stop in London. It’s also the first Asian university to establish a branch campus in Africa, in Botswana to be precise. Recently, other education institutions are following and are also expanding abroad.

And now the Malaysian government wants to make Malaysia a true education hub for the region, more or less like its southern neighbor. The Ministry of Higher Education has set a target of 100,000 students for 2010. Growth will probably mainly be sought in the region and in the Middle East. Together with Singapore, Malaysia probably offers the best quality higher education in Southeast Asia, although Thailand, the Philippines and Indonesia are catching up. Due to language (and cultural/religious) issues, Malaysia is popular for Indonesian students, especially for those that cannot get into the local public universities in Indonesia and cannot afford the top private ones or higher education abroad. For Chinese students Malaysia might be popular because of the widespread Chinese influences in Malay society, more apparent though in the private institutions than in the public ones. More recently, especially after 9-11, Malaysia has also become a popular destination for Middle Eastern students. Yesterday, the Star reported on an agreement between Higher Education Minister Datuk Mustapa Mohamed and his Saudi counterpart Dr Khaled Mohamed Al-Anqari on sending the Saudi students to Malaysian universities(*). In addition to the Middle East, students coming from Africa (especially Libya, Sudan and Kenya) are also on the rise (see table; click to enlarge).

Foreign Students in Malaysia 1999-2003

To reach the goal of 100,000 international students, the government will need to double the intake of foreign students. There are obviously pros and cons to a strategy like this. For many, a first reaction would be to ask why a government wants to increase the number of international students if it barely has the capacity to meet the demand of its own people? On the other hand, it can generate extra financial resources (if the fees for foreign students are profitable) by which the education of the Malaysian population can be supported. Obviously creating more multicultural campus will also have more intangible positive effects. And the quality of education can increase if these foreign students will be of such quality that they will positively influence the academic atmosphere and quality in the universities. And of course there are the economic effects through spending and consumption from the students and through the new jobs that are created for such an expanding higher education sector.

So...should the Singapore case make the Malaysian government nervous? Maybe not yet, but they better keep an eye on the developments in their neighboring city state. Malaysia’s plans are not as ambitious as Singapore’s ‘grand’ strategies and they are less dependent on foreign providers than is the case in Singapore. But I hope they will not become obsessed with the projected number of 100,000, and instead just focus on the overall quality of their higher education. Then the foreign students will follow automatically...

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(*) A small footnote...not directly related but important enough to mention.

Saudi government officials have been traveling the world for the past months in order to find ‘a conducive environment’ for their students to study. Especially because it was getting harder for them to get visas in the UK and the US. I remember that one of their officials visited Australian campuses as well, in order to ‘ínspect’ the universities here. I have not heard anything about this issue since...maybe the Australian culture was not considered very conducive by these government leaders, that always know best what is good for ‘their’ citizens...

But even Malaysia was not perfect. Saudi female students had specific requirements: “They have to travel with their chaperone who are either their male family members or husbands, so visas can be a problem. Another issue is dressing – some female students want to keep their faces covered.” The Minister said he would look into these issues... Covering the faces is not allowed in Malaysian public universities. And I think universities shouldn’t change their values just to benefit more from the international higher education market. Believe me, I work in Australia, so I should know!

Questions on the UNSW ASIA debacle

After three months in operation, the Singapore adventure of the University of New South Wales has come to an end. Another 22 million Singapore dollars down the drain. The decision to establish a branch campus in Singapore was taken in 2005 and already led to some commotion at that time (see this post). In 2005, UNSW from Australia and the University of Warwick from the UK were the only two foreign universities granted special status by the Singaporean Government (through its Economic Development Board, EDB) to set up a fully fledged independent teaching and research institution offering undergraduate degrees (the UNSW ASIA website has been taken down but click here for some info from the old website and here for some facts).

At that time, the senate of Warwick declined the offer of the Singapore government. The official reason for the Warwick senate to vote against the venture was the big financial risk. An additional reason however was the concern about the lack of academic freedom. UNSW had a different opinion, after all there was "no such thing as absolute freedom of speech in any country".

UNSW opened the doors of its Asia Campus at the beginning of the 2007 academic year, planning to reach a population of up to 15,000 students on the long term. But the campus will be closed down after only one semester:

Before making this decision, the University has explored an extensive range of options. However the enrollment numbers for 2007 did not meet our expectations, and this has caused us to revise our projections. The decision to close down is a difficult one but it is the prudent course of action to take.

UNSW Vice Chancellor, Professor Fred Hilmer inherited the situation when he became VC in 2006. In a press conference in the Straits Times video news he explains the UNSW decision to pull out (see the whole video here):

The economics of the campus, without significant support made it impossible to continue. While we had support for the initial concept from the EDB, as the enrollment played out and as the concept had to be changed, the risk of the venture increased.

The Economic Development Board stated that it regrets the decision of UNSW. Mr Ko Kheng Hwa, Managing Director, EDB said:

We regret that UNSW has decided to close the Singapore campus. EDB has been fully committed and has worked closely with UNSW from day one towards the establishment of its Singapore campus. EDB will push ahead with our efforts to realise Singapore’s Global Schoolhouse vision. We are fully committed to developing Singapore into a premier education hub comprising a rich diversity of high quality education institutions and programmes from all over the world.

UNSW Asia had only 140 students enrolled in its first semester, 100 of them being Singapore residents. The University had a target of 300 students for the first year. This all leaves me with two big questions:

1. What is the real reason? If the target was 300 and the enrollment was 140, would you stop an operation - that has been planned for two years and in which 17.5 million Australian dollars is invested - just after a few months? Of course not! This is just too abrupt. After investing this amount, you would at least try for a few years. Somehow I have the idea that there is more going on, but I can't figure out what it is.

2. Public universities and their private ventures. I am sure that UNSW and UNSW Asia keep separate books. But somehow UNSW, an Australian public university, will be affected by the costs of the Singaporese adventure. This discussion has come up in relation to the South African branch campus of Monash university as well. It clearly shows the risk of letting public organizations operate privately overseas. Of course, UNSW will argue that their Australian activities will not suffer from the UNSW Asia debacle. But the money has to come from somewhere. The costs are even likely to rise because UNSW has been so decent to offer their UNSW Asia students a place at UNSW in Sydney and will make scholarships available.

Two pressing questions. Whether we will ever know the answer to the first one? I don't know. But I hope the second one will be discussed because it addresses a fundamental issue.

UPDATE: look at my recent post on this issue for some explanations

Reality TV enters Academia

A cross between 'University Challenge' and 'The Apprentice'. That's how The Times describes a new TV show in India: Scholar Hunt - Destination UK. In the show, students will compete for full scholarhips to the universities of Leeds, Warwick, Cardiff, Sheffield and Middlesex. They will follow the students going through the exams, interviews and other tests for the scholarships. Each of the British universities will award one scholarship for a 3 year degree worth 45000 Pounds.

Arun Thapar, the show’s producer and presenter:

“It’s survival of the fittest, but hopefully this will provide someone with a life-changing opportunity. “We’ll be doing things that will be very engaging. The drama — the laughter and the tears — will be a key part of it.”

Mr Thapar also added that the universities would choose the questions and would not compromise their usual admission standards. The show, which will begin transmitting in India in July, combines the Indian craze for studying overseas with the growing popularity of reality TV. It also reflects the ambitions of British universities to recruit more Indian students in the face of cheaper competition from other Western countries.

According to The Times, NDTV is expecting tens of thousands of students to apply when registration starts via an online test on their website later this month. The top 2,000 applicants will then be filmed sitting exams and the top 200 will be interviewed on camera by a panel including university representatives. The top 100 will enter a studio quiz to select the 20 finalists. Finally, a second studio quiz will choose the five winners.

I tried to have a look at their website. But...it didn't work. Too popular perhaps?

India Rising (or part of it)

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:

The infrastructure deficit is so critical that it could prevent India from achieving the prosperity that finally seems to be within its grasp. Without reliable power and water and a modern transportation network, the chasm between India's moneyed elite and its 800 million poor will continue to widen, potentially destabilizing the country. Jagdish Bhagwati figures gross domestic product growth would run two percentage points higher if the country had decent roads, railways, and power. "We're bursting at the seams," says Kamal Nath, India's Commerce & Industry Minister. Without better infrastructure, "we can't continue with the growth rates we have had."

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:

"If you have to build a road in China, just a handful of people need to make a decision. If you want to build a road in India, it'll take 10 years of discussion before you get a decision."

And obviously, corruption is still a big problem:

Nearly all sectors of officialdom are riddled with graft, from neighbourhood cops to district bureaucrats to state ministers. Indian truckers pay about $5 billion a year in bribes, according to the watchdog group Transparency International. Corruption delays infrastructure projects and raises costs for those that move ahead.

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:

Rather than having successfully produced a “new middle class,” as touted in media representations of India’s success, emphasis on knowledge for development and a knowledge economy in India has had the effect of producing an elite with formidable economic strength, as well as the cultural dominance to re-imagine and negotiate meanings of Indianness.

(...) So long as those engaged in the knowledge economy are blinded by the belief that their success reflects the progress of the nation as a whole, and that their class positions are not privileged, the possibility for sparking true social and economic change greatly diminishes.

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.

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

Globalisation & Higher Education in *****

I found a recent post in one of my favourite blogs (or is it an online magazine?) on the demands that globalisation makes on higher education systems around the world. After reading it I noticed how global this debate has become and how it is so similar in very different parts of the world. Here are some summarising sections of the article:

The four challenges of globalization - the flight of talent, benchmarking to global standards, the possibility of education as a business opportunity, and the mismatch between supply and demand - have a common thread running through them. Inflexible and overtly regulated education systems are unlikely to respond to these challenges. Rigid academic systems all over world struggle to reposition themselves to respond to the challenges posed by globalization.

The ***** education system is one of the most tightly controlled in the world. The government regulates who you can teach, what you can teach them and what you can charge them. It also has huge regulatory bottlenecks. There are considerable entry barriers: Universities can be set up only through acts of legislation, approval procedures for starting new courses are cumbersome, syllabi revision is slow, and accreditation systems are extremely weak and arbitrary. The regulators permit relatively little autonomy for institutions and variation amongst them.

Globalization requires two contradictory transformations in the state: On the one hand, successful globalization requires that the state invest heavily in increasing access to education. But in higher education, globalization also requires the state to respect the autonomy of institutions so that a diversity of experiments can find expression, so that institutions have the flexibility to do what it takes to retain talent in a globalized world and, above all, respond quickly to growing demand. Globalization demands a paradigm shift in the regulation of higher education. In ***** the debate has only just begun.

You can fill in the *****. I think it could be Germany as well as France. China as well as Pakistan. Australia as well as Thailand. Uganda as well as South Africa. Greece as well as Italy...etc...etc. The solution can be found here.

Scarcity in China

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:

"The Director of a CAS research institute in Northeast China has said that while the people he attracts usually fall into the top 50% to 80% of overseas scholars, the top 20% still remain abroad. Rao Yi, a neurologist at Northwestern University in Illinois claims that, in terms of international reputation and prestige, few returning scholars are of comparable quality to those who stay abroad. He believes that there are between 800 to 1,000 scientists of Chinese origin running independent labs in the U.S., and that these people are unlikely to return."

Zweig's own research confirms this:

"In fact, surveys have shown that only a few scholars returning to China had to sacrifice high salaries or stable, tenured positions, and even fewer were returning with patents for innovative research. What's more, getting the very talented to return is just the first step; getting them to stay is another matter altogether."

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.

Outsourcing Homework

The Washington Post reports on another industry that is feeling the effects of outsourcing: education, and tutoring in particular. In the US, there are millions of dollars available under the No Child Left Behind Act to firms that provide remedial tutoring. And where there's money, there's people that want to make more money. And where people want to make more money, they need to lower the costs (click picture for enlargement):

When Studyloft.com, a Chicago-based tutoring company with more than 6,000 clients, advertised in Bangalore for tutors with master's degrees, more than 500 people applied for 38 spots, according to Bikram Roy, the firm's founder and chief executive. "There is just a huge hotbed of talent there in math and science," he said. "India has the best tutors -- the best teachers -- in the world."

Amita (15) for instance is being tutored by Lekha,

a $20-an-hour tutor who helps Amita with her geometry homework during twice-a-week, one-hour sessions. Using an electronic white board and a copy of Amita's textbook, Kamalasan guides her through the nuances of cross-multiplication, triangle similarity and assorted geometry proofs. Amita is one of 400 students enrolled with Growing Stars, a California-based company whose 50 tutors, most of them with master's degrees, work in an office in Cochin, India.

The demand for overseas tutors in the United States is creating a thriving industry in India. According to Educomp Solutions, a tutoring company in New Delhi, 80 percent of India's $5 million online tutoring industry is focused on students in the United States. But it doesn't stop with tutoring:

Some companies are thinking of educational outsourcing on a much broader scale than just tutoring. The Kentucky Community and Technical College System is outsourcing the grading of some papers to Smarthinking, a District-based online tutoring company that works with 70,000 students at 300 schools across the country and has both tutors in the United States and abroad. "Essentially we are acting as the teaching assistant," said Burck Smith, the firm's chief executive and co-founder. Right now, about 20 percent of Smarthinking's 500 tutors are in countries such as India, the Philippines, Chile, South Africa and Israel.

As is the case with the outsourcing of the automobile industry, of tax returns and of drug trials, this form of outsourcing also has its critics. Rob Weil of the American Federation of Teachers, for instance:

"We don't believe that education should become a business of outsourcing. When you start talking about overseas people teaching children, it just doesn't seem right to me."

A rather surprising statement for someone from the largest education exporting nation in the world...

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.

Outsourcing Drug Trials

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:

Like many in the pharmaceutical industry, Narula (medical director of a contract-research firm that organizes trials for major multinational) believes that the solution to the slow pace of drug trials lies in outsourcing. As many as half of all clinical trials are already conducted in locations far from the pharmaceutical companies' home base, in countries like India, China, and Brazil. And many industry analysts expect the market to skyrocket, particularly as expanding libraries of genetic information increase the number of drugs coming out of the lab. The consulting firm McKinsey calculates that the market in India for outsourcing trials will hit $1.5 billion by 2010.

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.

When the trial ended, however, Kalantri wondered whether he had served his patients well by enrolling them. At 800 rupees a day, the drug they had taken was too expensive for any of them to afford. Plus, even when it worked, it showed results for just a month. Such a minute and costly improvement might make sense in the US, Kalantri felt, but was it really the kind of medication that poor Indians should be testing? "The biggest problems around here are snakebite and insecticide poisoning," he points out. "We could really use a trial for one of those." He mentioned that the emergency ward contained a number of patients with a mysterious fever, one that epidemiological tests had been unable to identify. "It would be good to study it," Kalantri murmured, sounding a bit regretful. "Maybe we will, one day."

Technonationalism and Economic Globalism

This month's Far Eastern Economic Review featured an interesting article about Asia's nationalist policies in the globalised field of science and innovation. Here are a few sections, but read the full story here (free access).

P.V. Indiresan, the former director of the Indian Institute of Technology Madras: "The future of both China and India is at risk, because neither owns the technology it operates; the intellectual property continues to remain in the West. The short answer to this problem is that we should develop our own technology; we should acquire so much intellectual property that the West will be as much dependent on us as we are on them."

(...)

There has been a real effort to reach out to Asian diasporas in places such as Silicon Valley and Cambridge University. Successful Chinese, Korean, and Indian scientists are being successfully lured back to their home countries to new labs in new research centers stocked with the most advanced equipment. The Shanghai and Beijing municipal governments offer returning technology entrepreneurs tax breaks, subsidized office space and access to government-investment funds.

(...)

Mr. Wen's (Premier Wen Jiabao of China, Ed) January speech about 'independent innovation' was accompanied by commentaries in Science and Technology Daily that quickly pointed out that self-reliance did not signal the abandonment of the 'open door' policy and that 'independent' did not equate to 'insular' or 'closed'. Domestic firms themselves, moreover, have business strategies that may conflict with nationalist goals.

The very forces of globalization that are encouraging such knowledge transfers, however, are also undermining the abilities of Asian nations to effectively implement technonationalist policies or any top-down development strategy, for that matter. WTO restrictions on import quotas, tariff barriers, and export subsidies have gradually created more open and market-oriented economies. As a result, policy makers have gradually replaced state-led, highly centralized models of technological innovation with a more flexible and open system, increasingly dependent on foreign enterprises. As they have globalized, Asian societies have become less susceptible to top-down direction.

(...)

The twin forces of nationalism and globalization could, however, push in opposite directions. Changes in the security environment are the most likely scenario that would lead policy makers to more forcefully control the free flow of ideas or talent. Already worried about the rise of China's military power, the U.S. defense and commerce departments are currently considering new regulations limiting the ability of foreign students and researchers to work with information and technology that is export-controlled. Job loss in developed countries, especially among knowledge workers believed to be immune from the vagaries of international competition, could generate a backlash against globalization. A failure of Asian firms to actually work their way up the value chain and begin to control proprietary technology may also cause decision-makers to question whether they can truly break free of dependence on Western technology through integration with the global economy.

It will not be surprising to see innovation and technological challenges arising from countries not historically known for their scientific prowess. While globalization is a part of this story, an important and often overlooked element of this story is the nationalist agenda promoted by Asian states. The world may be flatter, but it is still populated by nation-states seeking to increase their wealth, power, and status.

Globalisation: 99 Definitions & Perspectives

While I was looking for a file in my computer I stumbled upon an old document. It's a file with a list of different perspectives and definitions of globalisation that I assembled for my doctoral research some years ago. I thought it might be of useful for students and scholars that are trying to grasp the possible meanings of the term.

It is a list of 99 (give or take a few) views from different disciplines and different sectors. Most are from academics, ranging from anthropologists to economists and from philosophers to business gurus. It includes statements from people as diverse as Bill Gates, Karl Marx and Vandana Shiva and organisations ranging from Greenpeace to the World Bank.

I converted the list into a website that can be found here (pdf also available). If you think any perspectives should be added, let me know..

Anyone but the King

Thailand is one of the countries in Southeast Asia that has shown rapid development. Economically it has done very well. It recovered relatively easily from the financial crisis in 1997 and is showing good progress in recovering from the 2004 Boxing Day tsunami. It has liberalised in terms of trade, but it has also become more open politically.But of course there is one thing that you cannot do, and that is to criticise King Bhumibol. The Chronicle reports:

The government of Thailand has blocked access in that country to the Web site of Yale University Press. The move is in response to the site's publicity material for The King Never Smiles: A Biography of Thailand's Bhumibol Adulyadej, a book in which the author criticizes the king of Thailand.The government will also ban importation of the biography, which Yale is to publish in July. At various times after an initial blockage of the Web site earlier this month, parts of it were viewable within Thailand. Now access is fully censored, with a notice that reads: This Web site has been blocked by Cyber Inspector, the Ministry of Information and Communications Technology.

What's the right atmosphere?

The International Herald Tribune yesterday reported about China’s investments in their universities.

China is focusing on science and technology, areas that reflect the country's development needs, but also reflect the preferences of an authoritarian system that restricts free speech. The liberal arts often involve critical thinking about politics, economics and history. The government has placed relatively little emphasis on achieving world-class status in these subjects. Yet, many Chinese say - most often indirectly - that the limits on academic debate could hamper efforts to create world-class universities

"Right now, I don't think any university in China has an atmosphere comparable to the older Western universities - Harvard or Oxford - in terms of freedom of expression," said Lin Jianhua, the executive vice president of Peking University. "We are trying to give the students a better environment, but in order to do these things we need time. Not 10 years, but maybe one or two generations."

The question is: can China wait for two generations? Artists and academics are already raising their voices.

But the biggest weakness, many Chinese academics indicated, is the lack of academic freedom. Yang, the former president of Fudan, warned that if the right "atmosphere" was not cultivated, great thinkers from overseas might come to China for a year or two only to leave, frustrated. Gong Ke, a vice president of Tsinghua University, said universities had "the duty to guarantee academic freedom. We have professors who teach here, foreigners, who teach very differently from the Chinese government's point of view. Some of them really criticize the economic policy of China."

Li Ao, a well-known Taiwanese writer, called for greater academic freedom and independence from the government in a September speech at Peking University. The next day, after reportedly coming under heavy official pressure, he delivered a far tamer version of the speech at Tsinghua University, where media coverage was tightly controlled. The Chinese government also censors university online bulletin boards and discussion groups, and recently prevented students at Zhongshan University in Guangzhou from conversing freely with visiting elected officials from Hong Kong.

Students here are not encouraged to challenge authority or received wisdom. For some, this helps explain why China has never won a Nobel Prize in any category. What is needed most now, some of China's best scholars say, are bold, original thinkers.

How long can a highly educated population be censored and restricted by government regulation? And can you have sustainable world-class universities without academic freedom?    

Whartonization

The Wharton School of Business of the University of Pennsylvania seems to have become very popular in Southeast Asia. The Singapore Management University that was established in 2000 was modeled after the Wharton School.

"Its educational and administrative practices are modeled after American institutions, in particular the Wharton School of the University of Pennsylvania, which has played a central role in SMU's development."

Today, the New Straits Times reports that Malaysia is going to be home to a top-class business management institution, modeled on.. the Wharton School of Business. Special Envoy to the Higher Education Ministry Datuk Seri Effendi Norwawi said the business management institution will involve a tie-up with Wharton Business School at the University of Pennsylvania, one of eight Ivy League institutions in the United States. One of the Special Envoy's chief tasks is to persuade top-notch universities to either set-up branch campuses here or work with other institutions here. Tony, a critical observer of Malaysian higher education, also reports on the issue.

I am currently working on a paper on international isomorphism and the global diffusion of higher education and research policies. I guess this makes a good example.

Update: I just noticed that the New Straits Time also has an interview with Effendi in today's issue: 'Roll out the red carpet for foreign students'