Rankings, politics, geography and the global knowledge economy

Introduction

Chapter 8 continues the exploration of the international context discussed in Chapter 7 by looking at rankings, the global knowledge economy and the impact of political change and geography on the development of higher education. The forces of the global knowledge economy can be described in terms of a ‘push’ and ‘pull’ effect where the ‘push’ encapsulates the movement of the economy, higher education funding and academic mobility, and the ‘pull’ relates to contemporary' political influences on the global knowledge economy. The changes emanating from the new governance structures in the US and the UK are discussed in more detail to demonstrate that the impact of new administrations in both of these countries will continue to influence global higher education.

The push and pull of the global knowledge economy

Rankings make it possible to see how national universities fit into the international agenda. This enables universities to reflect on their position within the global academic market (Yudkevich, 2015). Establishing world-class universities is sometimes seen as interlinked with success in the global economy (Wint & Downing, 2017). Consequently, countries pour large amounts of money into their higher education budgets with an eye on rankings and their capacity to do so is affected by the strength of their individual economies (OECD, 2017; Hazclkorn & Ryan, 2013). Demographic drivers, economic drivers and bilateral trade patterns are linked to increased competition and tertiary' expansion (British Council, 2012). Hazclkorn and Altbach (2017; para. 15) state that “without massive financial and other resources, it is almost impossible for academic institutions to improve their ranking status”.

The economic projections of countries are referenced to provide context to the global knowledge economy. The professional senices firm PricewaterhouseCoopers (PwC) analysed high level trends expected to shape the global economy (ICEF, 2015). PricewaterhouseCoopers LLPS’s (2015; 13) methodology' incorporates data from the International Monetary Fund’s World Economic Outlook (October 2014) estimates and are driven by key factors like;

  • • Growth in the labour force of working age (based on the latest UN population projections);
  • • Increases in human capital, proxied here by average education levels across the adult population;
  • • Growth in the physical capital stock, which is driven by capital investment net of depreciation; and
  • • Total factor productivity growth, which is driven by technological progress and catching up by lower income countries with richer ones by making use of their technologies and processes.

The latest analyses suggest a dramatic shift in economic power from advanced economies such as North America, Western Europe and Japan towards Asia and a block of faster-growing emerging economies (PricewaterhouseCoopers LLP, 2015; Sharma, 2015a, 2015b). The three biggest economies, China, India, the US and the rest of the globe will get larger in the coming decades (ICEF, 2015; PricewaterhouseCoopers LLP, 2015). During 2014, the third largest economy in Purchasing Power Parity (PPP) terms (India) was around 50% larger than the fourth biggest economy (Japan) (ICEF, 2015). PwC forecast that by 2050, India will have surpassed the US to become the second largest economy in the world and that the gap between the 3rd and 4th biggest economy, respectively the US and Indonesia, is expected to grow to 240% (PricewaterhouseCoopers LLP, 2015).

Moreover, the US and EU share of the global GDP, in PPP terms, will decrease from 33% in 2014 to about 25% by 2050. Emerging economies perceived to have the potential for sustainable long-term growth include Colombia, Brazil, Poland and Malaysia. Mexico and Indonesia projected to be larger than the UK and France (in PPP terms) by 2030 and Turkey have the potential to be larger than Italy (PricewaterhouseCoopers LLP, 2015). PricewaterhouseCoopers LLP (2015) forewarn rapidly growing economies against an overdependence on natural resources, countries like Russia, Nigeria and Saudi Arabia should aim to diversify their economies to sustain current growth over the long term.

The rise of East Asia as an international knowledge network

The rise of East Asia as an international knowledge network is at least partially driven by various higher education systems of which China is a dominant force (ICEF, 2016; Sharma 2015a, 2015b; ICEF 2013; British Council, 2012). China’s research and development spending has grown by an average of 23% a year during the past decade (Bothwell, 2016). During 2015, China spent more on research and development than any country except the US (Bridgestock, 2015). Bothwell (2016) compares the size of a big Chinese university’s budget with that of all 18 Indian institutes of technology. It is therefore not surprising that China dominates the THE and QS BRICS (Brazil, Russia, India and South Africa) ranking system (Bridgestock, 2015; Bothwell, 2016). China is building a mass higher education network with world-class universities and may one day compete with the top US institutions (Marginson, 2016; Altbach, 2016).

India will surpass China as the country’ with the largest population of higher education students (119 million) by 2025 (PricewaterhouseCoopers LLP, 2015). One of India’s key focal points is not only to broaden higher education access but improve higher education quality' (ICEF, 2016; Sharma, 2015a). In an attempt to aid this ambition, the Indian government established an enabling regulatory' architecture to provide ten public and ten private institutions to emerge as worldclass teaching and research institutions (ICEF, 2016; Sharma, 2015b). A number of emerging market destinations have actively sought to attract inward investment in the tertiary sector by' branding themselves as education hubs or similar (British Council, 2012).

The significant shift in global economic influence will be mirrored by international student mobility' (ICEF, 2016). India, China, US and Indonesia will account for over half of the world’s 18-22 population by' 2020 (British Council, 2012). Additionally, the US, Pakistan, Brazil, Bangladesh, Ethiopia, and the Philippines are expected to house large student-aged populations by' 2025 (ICEF, 2016).

 
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