Higher Education, Internationalization, and Economic Competitiveness

Abstract

The analyses of higher education’s role in economic development tends to follow a domestic perspective. Colleges and universities can be significant drivers of economic growth for the communities where they are located. These institutions improve the workforce, create jobs, foster innovation, and attract new business and industry. However, as globalization has fostered a worldwide market for goods and services, higher education is no longer a resource confined exclusively to the domestic domain. Both political and economic borders have become porous, allowing individuals and institutions to move more freely among nations and economies.

Today, many nations are involved in the great brain race, a phrase used by Ben Wildavsky to describe the increasing competition among nations for new knowledge and innovation. Governments increasingly adopt comprehensive competitiveness strategies designed to improve their economic position in the global economy. Recognizing that an advantage of the great economic powers of the last century was their higher education sectors, many governments are now seeking to expand the capacity and quality of their own sectors. This, at times, includes actively recruiting and retaining students, scholars, programs, and institutions from other nations — particularly those perceived to have strong higher education systems. Some of these nations are using the higher education resources of other nations to decrease the competitive advantage gap between them. In this new environment, governments have begun to realize that higher education institutions are important anchoring tools as they help to attract and retain students and alumni. Governments also recognize that such institutions drive innovation and industry development, and have begun to invest in research institutions, research parks, and research programs.

Despite the growing importance of higher education to international economics, there remain very few studies of these important economic contributions. There are two primary reasons for this omission. First, universities have only recently been thought of as having an important role in the international marketplace. Second, measures for determining the economic contributions of higher education at the international level are scattered throughout national and international surveys, as few agencies seek to compile this type of information. However, that such efforts are not (or cannot yet be) systemically analyzed does not signify that such activity does not occur or that it is marginal.