Higher Education as an Engine of Advancement
The global economy is increasingly knowledge intensive, putting pressure on nations and their higher education systems to produce highly skilled labor as well as to teach people how to access, produce, and use knowl- edge.29 International agencies, governmental policy makers, and leaders in the private sector view higher participation rates in postsecondary education as a key factor in achieving greater economic and social development, creating wealth, and reducing poverty.30
Today’s global knowledge-based economy is prompting international development organizations and institutions like the WB to focus more than ever on the role higher education can play in the development and growth of emerging economies.31 Such institutions previously viewed higher education as an expensive and inefficient public service that largely benefited the wealthy and privileged. Now, however, they consider it to be an essential engine for successfully boosting a country’s productivity, competitiveness, growth, innovation, and performance across key economic sectors.32
Policy makers increasingly recognize that both private and public benefits can be gained from higher education. For individuals, those benefits include better employment prospects, higher salaries, and a greater ability to save and invest. Such benefits may also result in better health and an improved quality of life, creating a virtuous cycle in which life-expectancy improvements enable people to work more productively over a longer time—further enhancing lifetime earnings.
In a knowledge economy, higher education also provides broad public benefits, helping less-developed national economies keep up or catch up with more advanced ones. Higher education graduates are likely to be more aware of and better able to use new technologies than those without postsecondary degrees. They are also more likely to develop new tools and skills. In addition, their knowledge may generate entrepreneurial ventures, with positive effects on job creation, as well as improve the skills and understanding of nongraduate coworkers.33
In 1998, UNESCO and the World Bank Task Force on Higher Education and Society issued a report that concluded that, in the present globalized knowledge economy, higher education was necessary.34 Two years later, the bank acknowledged the “need to embrace a more balanced, approach to the entire lifelong education system, irrespective of a country’s income level.”35 In fact, in their book, Stratification in Higher Education A Comparative Study, Yossi Shavit, professor of sociology at Tel Aviv University; Richard Arum, professor of sociology and education at New York University; and Adam Gamoran, professor of sociology and educational policy studies at the University of Wisconsin at Madison, state the “most significant” reason that low-income countries began to focus on improving participation rates in higher education at that time was the WB’s policy reversal on higher education.36
Less than a decade later, in 2007, the WB37 released its new strategic report specifically for Africa, “Expanding the Possible in subSaharan Africa: How Tertiary Institutions Can Increase Growth and Competitiveness.” In that report, the bank stated that a more knowledge-intensive approach to development was essential for African countries. It held that education was the only path that could lead to sustained outward-oriented development, given the circumstances in Africa and the global economy. And it maintained that a knowledgeintensive strategy required a greater focus on tertiary education and research.38
How has South Africa fared after apartheid when it comes to higher education? According to N’Dri T. Assie-Lumumba, a professor at Africana Studies & Research Center at Cornell University, for decades, educational reform has been a symbol of “freedom and self-determination for African countries.”39 And in South Africa, as in many postcolonial African nations, education has become a vehicle to redress past inequalities and a tool for training the labor force to meet the country’s economic plans. Since the end of apartheid, the number of students attending universities has grown tremendously. The most recent data show that the number of students enrolled in public higher education has more than doubled from 495,356 students in 1994 to close to one million (968,890) in 2014.
In particular, greater numbers of historically disadvantaged students have been attending college. Just 12 years after the end of apartheid rule, in 2006, the number of black and mixed-raced students attending university had risen by 268 percent.40 As of 2013, black students made up 68 percent of all students in public higher education institutions, with colored students representing 7 percent and Indian students making up
- 5 percent.
But while the numbers are impressive, they don’t tell the whole story. Of those students enrolled today in higher education, 55 percent are not expected to graduate.42 In fact, in 2013, graduation rates were lower than targets set by the National Plan for Higher Education (NPHE), with just 15 percent ofundergraduates, 21 percent ofmasters students, and 13 percent of doctoral students graduating.43 Those numbers are high for countries in sub-Saharan Africa but low compared to other parts of the world.
The fact is that the increase in access has also meant an increase in the financial burden that students and their families carry. The overall budget for higher education in 2007-2008 was R13.3 billion, representing 0.65 percent of GDP, and that figure increased to 0.075 percent in 2011. Since 1994, however, the proportion of the national budget going to higher education has declined—which has meant that students and their families must pay more. Government contributions decreased from 49 percent in 2000 to 40 percent in 2012, for example, while students’ share increased from 24 percent to 31 percent during the same period.44
As a result, dropout rates for first-generation students from low- income, less-well-educated families have been high, and less than one in three students have graduated on time. The participation rates have often broken out along racial lines, as well, since many more black students continue to be from low-income families than whites. For example, in 2007, of all students with a low socioeconomic status, 73 percent were black compared to just 12 percent who were white. Similarly, only 9 percent of black students came from a family with a high socioeconomic status, whereas 47 percent of white students did.
In fact, while people recognize the crucial role that higher education plays in a global knowledge-based economy, questions remain as to who truly benefits from its expansion. Despite the progress many countries have shown in increasing the participation rates of less-privileged groups, the majority of students still come from affluent segments of society. In the words of Shavit, Arum, and Gamoran, “It is debatable whether educational expansion reduces inequality by providing more opportunities for persons from disadvantaged strata, or magnifies inequality by expanding opportunities disproportionately for those who are already privileged.”45
Government policies in South Africa, especially since Zuma took office, have been put in place to expand access to higher education and support low-income students. Many of the poorest students receive financial aid through the National Student Financial Aid Scheme (NSFAS), which was expected to spend $180 million on loans and scholarships in 2016—or double the amount awarded two years earlier.46 In 2015, close to 500,000 university students received a state loan, versus just 7,240 in 1991.47 Further, student loan allocations are expected to rise from R5.1 billion in 2013 to R6.6 billion in 20162017. And there is no doubt the government’s focus on access has been somewhat successful.
Yet, in the end, higher education is still primarily a place for those with resources and social capital, with a high cost of attending university and low retention rates. Moreover, because higher education is an important element in the process of state building,48 some observers have argued that any educational reform has been largely for show. They believe it should be considered as just one more of a number of “symbolic gestures designed to indicate governmental awareness of problems and sympathetic intentions, rather than serious efforts to achieve social change,” in the words of N’Dri T. Assie-Lumumba.49
We’ll explore these and other issues, such as recent student protests and the government’s reaction to growing concerns about its higher education system, in Chapter 6.
Sidebar: Higher Education and Economic Development and Growth
A key concept in understanding the relationship between higher education and economic development and growth is the concept of human capital. Human capital is the skills and knowledge available to participate in labor, which results in economic value.50 A well- known application of the idea can be found in Gary Becker’s book, Human Capital. According to Becker, human capital is similar to physical assets (factories and machines) in that one can invest in it via education and training. One’s output as a worker depends on the human capital one possesses. In this model, additional investment yields additional output.51
The role of education as an input in the production process and its contribution to economic growth can be looked at in a variety of ways. One way is to consider the level of education of each worker as an efficiency unit. This view holds that ifyou keep the number ofworkers the same and increase the number of years of schooling per worker, you increase the efficiency unit, generating greater output. Growth in the number of years of education per worker increases the growth output per worker.52
Another view holds that an uneducated worker has a different input than a worker with a higher level of education. That difference in input requires different production processes for each type of worker. If a country relies more heavily on exports, it will focus on production processes such as those found in the apparel industry— which do not require a high level of education. If it relies more on technologically oriented goods, it will require a labor force with a higher level of education.53 Researchers have found evidence that, as developing countries increase their education levels to those of developed countries, they can move from an export-based economy that relies on less-educated workers to an economy based on the export of more technologically advanced products and participate more fully in the knowledge economy.54
Historically, studies measuring the return on higher education have been limited to the traditional financial rewards that individuals accrue and the tax revenues they generate. Today, studies are examining the broader benefits of higher education, such as entrepreneurship, job creation, good economic and political governance, improved health, and social benefits. In particular, there is growing interest in understanding the speed at which an emerging country can adopt technology and what impact that has on the rate of its economic development and growth.55