The Economist Survey on Higher Education

[Posted by Kian Ming]

The Economist, a reputable newspaper with a worldwide circulation has published a survey of higher education in its latest issue (September 10th to 16th, 2005) entitled ‘The Brains Business’.

Because of the myriad of issues tackled in this survey, Tony and I thought we make the debate more interesting by separately commenting on different points of interest. Questions such as the funding of schools, the nature of competition, the effects of globalization, the increase in the % of the populace entering into higher education, the rise of the knowledge economy, the rise of China and India, all merit at least some attention. Most importantly, we want to draw the debate back to implications for the state of higher education in Malaysia.

I’ll start the ball rolling by commenting on what I’ve been recently exposed to – the US university system. The Economist survey highlights the Shanghai Jiao Tong University ranking of Top 500 universities to illustrate the dominance of US universities at the top of the rankings. Interestingly, despite being a London based newspaper, it chose not to use the Times Higher Education Supplement (THES) as part of this survey. UM does not appear in the Shanghai ranking though it appears at no. 89 on the THES survey. This issue was discussed Harvard University has an endowment of US$22.6 billion dollars. Even if we assume a relatively conservative return of 10% per annum (those who manage Harvard’s endowment have routinely generated returns in excess of 20% per annum), we’re talking about an income stream of US$2 billion a year. Not to mention additional funds from wealthy alumnus, fees and external grants. These funds can be used in a variety of ways – financial aid to good students, infrastructure improvement, recruitment of the best faculty, funding ground breaking research projects etc…

It is remarkable that large endowments are not only restricted to private universities but extend to public universities as well. The University of Texas at Austin and the University of Michigan at Ann Arbor, both world class public universities, have endowments exceeding US$4 billion dollars.

Having a generous endowment certainly helps but it needs to be combined with strong, visionary leadership on the part of the university as well as a shrewd and careful allocation of resources. My own university, Duke, was officially ‘founded’ only in 1924 with a large endowment from James B Duke, a tobacco baron. Slowly but surely, it made steady strides forward in its academic reputation. It was probably only in the last 20 years that Duke became ranked among the elite universities. In the latest US News and World Report PTPTN is already doing something similar) The notion that we are entitled to a free public higher education regardless of our financial standing needs to be abandoned.

Many foreign universities are supplementing their income by increasing the intake of fee-paying overseas students. One of my alma maters - the London School of Economics (LSE) – has a non-UK undergraduate population that is close to or over 50%. Monash’s non-Australian undergraduate population is probably close to 30%. Will the public universities be open to admitting a larger number of higher fee paying foreigners? (Assuming that the current number of foreigners in UM and USM is not as high as indicated by the THES survey) Especially given the political ‘sensitivity.’ of places in our public universities in regards to the racial makeup?

Malaysian universities cannot hope to match the endowments or the financial resources of the top universities in the US. That is impossible given the small size of our country in terms of GDP as well as population. But we can at least start thinking of ways to diversify and increase the income stream of our public universities as part of a larger reform agenda to improve the dismal state of higher education in our country.

Next issue on the agenda – competition.

Note to earlier readers - due to a technical complication with the earlier post, I have "re-posted" this article. As a result 2 comments were "lost". Apologies for the error.