A recent report from the UNESCO Institute for Statistics (UIS) reveals
the explosive growth of higher education across Asia over the last 20
years. As the Republic of Korea and Japan lead on many fronts, the
superpower-in-waiting, India, is weak in many facets, including research
and development (R&D) intensity. The report highlights the ways in
which R&D can boost national economic development and argues that
expanding graduate education should be viewed as a means of increasing
the economic competitiveness of the country. It also calls for the
countries to have a balance between �expanding out� and �expanding up�
By Dipin Damodharan
Karan Arya is an engineering degree holder from the South Indian state
of Karnataka. After a massive job hunt, she managed to get into a
mid-sized IT firm, but now she is struggling hard to cope with the
technical aspects of the job. The company labelled her unemployable and
she is on the brink of losing the job. There are many who share Karan�s predicament in Asian countries as university enrolment has
witnessed an explosive growth for the last two decades. Many countries,
including India, have failed to give thrust to the quality of
graduation programmes in line with the mushrooming of higher learning
institutes.
Pavan Soni, an innovation evangelist and research fellow at Indian
Institute of Management (IIM), Bangalore, India, tells Education
Insider: �Though we have a significant �quantity� of educated people,
the �quality� continues to suffer. This happens mainly owing to the
demand of a huge population and also owing to poor standards set by
bodies and academic institutions. Studies conducted by firms like
McKinsey & Company and India�s NASSCOM indicate that just about 25%
of India�s educated population is employable! This means that a good
three-fourths either would have to be retrained or would remain
unproductive. A focus on research-led quality education is the need of
the hour. I believe that even if we have fewer people educated, let us
not compromise on quality. The case of smaller nations like Israel and
Singapore comes to mind here, where quality pips over quantity.�
The situation is not the same in other Asian countries like the
Republic of Korea, Japan and Malaysia. Getting into the issue seriously,
many countries are intensively involved in a substantial mission to
increase the quality of education by focusing more on research. It is
also significant to address the core question � what should be the
purpose of higher education, particularly in the universities?
It was in this backdrop that the UNESCO Institute for Statistics (UIS),
the statistical arm of UNESCO and the UN depository for global
statistics in the fields of education, science and technology, culture
and communication, came up with a comprehensive report titled �Higher
Education in Asia: Expanding Out, Expanding Up�. The report, which was
released on May 19, 2014, in Bangkok, by the Office of Higher Education
Commission, Mahidol University and UNESCO, looks at the dynamics
associated with the development of higher education in Asia.
The UIS report analyses ways in which countries across the region can
accommodate more students (expanding out) while strengthening the
quality of their university programmes and research (expanding up).
Hendrik van der Pol, Director of the UNESCO Institute for Statistics,
tells Education Insider: �We see countries engaging in a mix of
strategies to expand their higher education institutions. They begin by
expanding outwards, by building new campuses, for example, and
encouraging growth in the private higher education. At the same time,
these systems are expanding upwards � to reach new academic levels � by
introducing new postgraduate education programmes.�
The report focuses a range of issues varying from the spectacular rise
in enrolment, the reshaping of higher education across Asia, case
studies of Malaysia and Thailand to university-based research and
R&D intensity. However, in this edition, Education Insider tells you
about the role of university-based research in the economic development
of middle-income and low-income countries.
Defining the purpose
�What is the purpose of education? Is it for economic good or not?�
asks Pavan Soni. �I believe that whether one studies for doing a job or
research or even starting a business, it must result in economic growth.
Hence, the key success factors to me are the quality of education and
its content in terms of relevance. There is no purpose in an education
which does not help in economic growth, directly or indirectly. The case
of China is exemplary here, as it has rallied millions of people into
doing globally relevant work and lifting the people off poverty. The
instances of South Korea and Singapore � the countries that transformed
themselves remarkably over the years � is mainly owing to their
investment in education which was relevant to their growth,� Pavan says.
Hence the activities of the universities, in particular research,
should yield economic results. For this, the universities have to focus
on R&D, and university-based researches should get huge investment.
When you look at history, the economic booms were found to be a result
of technological advancements and these technological developments are
the result of knowledge.
According to the UIS report, �the most dynamic economic sectors in the
global marketplace are those that are technology-intensive, and they
depend on the capacity to generate, adapt and utilise knowledge as the
foundation of productivity growth. This is equally true for the services
sector as it is for manufacturing.� This is evident from the growth of
high-income countries. Huge investments in R&D are regarded as the
pivotal reason for innovation and economic growth.
�Technology accounts for over one-half of economic growth in all member
countries of the Organisation for Economic Co-operation and Development
(OECD) except Canada,� UIS report continues. �The rate of return from
R&D is about four times from physical capital. �The US Bureau of
Economic Analysis� first satellite R&D account estimated the
contribution of R&D to economic growth to be 6.5% over the 1995-2002
period, up from the longer term 40-year average of 4.5% (by comparison,
the 40-year average contribution of buildings and factories is only
2%). Of note is that this estimate is only for the impact of R&D
investment on the industry in which the R&D is conducted. Analyses
of industry-level impacts of R&D indicated that about one-half of
output growth and three-quarters of productivity growth are attributable
to R&D investment.�
The UIS study finds that the social return from the R&D exceeds
private return by 50%-100% gradually. Look at another example: between
1988 and 2010, US federal investment in genomic research resulted in an
economic impact of $796 billion, while spending on the Human Genome
Project between 1990 and 2003 amounted to $3.8 billion only. Here the
return on investment ratio is of 141:1.
Universities, research & economic growth
For effective knowledge production and dissemination, universities need
to play a vital role. They can speed up innovation and technical
progress. As said in the UIS report, they play a central role not only
as producers of basic research but also by creating human capital in the
form of higher skilled labour.Hendrik van der Pol of UIS says:
�Research is a fundamental part of the mandate of universities in
general. They are responsible for preparing students to participate in a
knowledge-based economy. Research activities will raise the profile of a
university and make it a more attractive place to study. These
activities also ensure that professors stay abreast of current
developments in their fields, which makes them better teachers.�
Unlike in the high-income countries, the contribution of
university-based research to the national economic development of
low-income and middle-income counties is not clear. These counties have
to strengthen their channels to access and capacity to use technology.
According to the UIS report, this process of �catching up� generally
occurs through imitation and technology acquisition rather than
independent R&D and innovation. �However, technology transfer poses
substantial problems of adaptation and absorption that are related to
investments in technological capability. A successful transfer requires a
complex array of skills, knowledge and organisational structures to
operate a technology efficiently and accomplish any process of
technological change. This dynamic effort implies a process of
learning.�
When you have a large poorly educated population, you certainly need no
factors for poor innovative performance. The UIS report continues:
�R&D is unprofitable for low levels of human capital and becomes
profitable only when human capital reaches a threshold level. The
presence of skilled labour is a more decisive mechanism for the
transmission of tacit knowledge than either university research or
industry research. Improving human capital by formal education and
continuous R&D activities increases the absorptive capacity of
firms, thereby facilitating technology adoption and mastery.�
Then what is the role of universities in low-income and middle-income
countries? The report answers: �The most important role of universities
in these countries is not just to generate new knowledge but to raise
the skills of the population, that is, to build up human capital, and to
help absorb ideas from developed countries.�
Unlike their peer institutions in developed countries, these
universities are under-funded and unable to purchase and apply the
latest research equipment. The faculty and staff seem to be less
qualified and the salaries of professors are so low.
Pavan Soni says: �India does not rank high on research. For instance,
there is not a single Indian university in the 2013 Nature Publishing
Index, or even in 2013 Times Higher Education Ranking Top 200. Research
improves the quality of teaching, which, in turn, improves the
effectiveness of the graduating students. In my view, research requires
three ingredients: funding, ecosystem, and talent. India needs to invest
in building facilities and attracting top researchers from across India
and even abroad, and help them with a conducive ecosystem. In India,
our research is much more insular than most parts of the world; as a
result, we are either working on wrong problems or working with wrong
set of people. In this connected economy, one cannot afford to remain
insular.�
In countries like Thailand, the number of Thai PhD graduates is
inadequate to replace the professors who are retiring over the next five
years. Dr Ajeenkya D Y Patil, chairman of DY Patil Group, an active
player in higher education, comments: �In India, we have a dearth of
university-led research. The research happening at universities is
mostly esoteric. There is a fundamental flaw in the system. After
Independence, in order to give impetus to scientific development, we
created national research laboratories. While these research labs served
a purpose, it took away research from university campuses. Most of the
research and related funding was prioritised towards these labs which
should have come to universities.
�Seeds of great innovations and technological breakthroughs,� eminent
Indian scientist Prof. C N R Rao says, �are often sown in academic
institutions. This is so in the US, Japan and many advanced countries.
We, in India, have to ensure that at least some of our educational
institutions contribute in a big way to industrial and economic
development through their research efforts.�
In the opinion of Pavan Soni, �universities are crucibles of modern-day
education as they offer holistic learning to the students. The presence
of multiple faculties/ disciplines at the same campus is vital for a
broader appreciation of science and humanities by the students. A
student only adept at Engineering or Commerce would be ineffective in a
fast-changing world than someone who has an appreciation of multiple
disciplines. A university system where students from different
disciplines exchange thoughts and share time is much needed now in
India. For instance, the famed IITs and IIMs still remain
non-university-oriented, as the focus remains unitary. On the contrary,
most technology and management institutes in the West are based in a
university setup, thereby providing the students with multiple avenues
of learning.�
According to a report from World Bank, the universities in low-income
countries have to improve continuously their teaching and research
capabilities in order to be able to meet the future needs of their
societies.
Korean model
The Republic of Korea has witnessed a remarkable growth in R&D.
According to the data of UIS, the GDP per-capita increased 12 times over
a period of 45 years. Look at the R&D expenditure � a dramatic rise
from 166 million in 1965 (in constant 2005 PPP$) to PPP$55 billion in
2011. This shows an increase from 0.26% of GDP in 1965 to 4.04% in 2011 �
one of the highest in the world. The private sector registered 76.5% of
total R&D expenditure and 66.8% of the total number of researchers
in 2011. Though the Republic of Korea was one of the poorest countries
following the Korean War in the 1960s, the country has registered
commendable growth with the development of its R&D over the last
four decades.
According to UIS, the Republic of Korea�s development of R&D system
can be divided into three phases. The following are the highlights of
the three phases quoted in the report:
First phase: The 1960s saw the promotion of both export-substitution
and import-substitution industries such as textiles, garments,
furniture, and assembly of electronic goods. When those labour-intensive
industries expanded, they established select heavy industries and
chemical industries to provide materials and components for these
enterprises. The formation of Korea Institute of Science and Technology
(KIST) in 1966 was crucial for technology assimilation and development
of industrialisation. In the 1970s, the country expanded into strategic
industries, such as shipbuilding, machinery, industrial chemicals,
electronics and automobiles. Specialised government research institutes
(GRIs) were created as technology windows for diversified technological
needs. Technological learning, as opposed to indigenous technology
development, was at the core of the development strategy in the early
stage.
Second phase: During the 1980s and 1990s, the socio-economic R&D
demands focused on critical and essential technologies to overcome
protectionism and secure competitive advantages in the international
market. In the 1980s, efforts were made to ensure a market-conducive
environment by deregulating various sectors and liberalising trade.
R&D in the private sector started picking up in response to these
demands. More company research institutes began to emerge to create
technology-intensive industries, and in-house R&D emphasised
technology indigenisation for the creation of new information-technology
industries. It was during this phase that higher education was
expanded, and the government launched national R&D projects and the
Industrial Technology Development Programme. Large companies
internalised imported technologies, and the joint efforts of GRIs and
universities were able to provide complex technologies needed for
industry.
Third phase: After the financial crisis of the late 1990s, emphasis was
placed on fundamental technologies to lead the global technology market
for continuous growth in the knowledge economy and public technologies
(such as technologies for environmental protection) in order to meet
various social demands. The role of universities in basic research
became more important and industry academic linkages were encouraged.
The private sector realised the necessity to develop technologies needed
for future knowledge-intensive industries and directed the work of
their research institutes towards this. It also began working with GRIs
and universities in strategic partnerships to develop a domestic
technology base. Investment in education has played a significant role.
To achieve sustained productivity growth by consistently increasing the
value-addition of output, a highly educated workforce was necessary.
Education gives rise to a person�s initial tacit knowledge, which is an
essential building block in technological learning. A continued
expansion of R&D capabilities in industry drew on the skilled
workforce that had resulted from the government�s expansion of the
higher education system.
In Pavan Soni�s words, Funding, Focus and Exposure are the three
factors behind this kind of a success saga.
What universities can do
The UIS report says that the overall level of human capital in many
low-income and middle-income countries is insufficient to absorb foreign
technology. Here is a list what they can do to contribute to national
economic development, according to the UIS report:
