A matter of degree

The development of research excellence is what matters to a country - not the numbers in higher education.

by Alison Wolf, World Business
Last Updated: 23 Jul 2013

The Western world's politicians and many business leaders are currently highly exercised by the rise of China and India. They are also busy scaring themselves with the idea that the latter will soon be 'beating' them in every respect: not just in call centres, back-office outsourcing and consumer good manufacture, but in hi-tech and innovation too.

One favourite statistic quoted in support of this argument is the numbers of engineers pouring out of Indian and Chinese universities, which is typically put at 650,000 a year for China and 350,000 for India. This contrasts with the numbers graduating in engineering from Western institutions - typically, 70,000 for the US and 20,000 for UK universities.

The conclusion drawn by the developed nations is that they need to increase their output of engineers and scientists, or they are for the breadline. In the US, the House Democrats' Innovation Agenda, launched in 2006, calls for 100,000 more graduate scientists, mathematicians and engineers by 2011, while in his 2006 State of the Union address President Bush called for 100,000 more maths and science teachers as a basis for improvement and expansion.

In the UK, Chancellor of the Exchequer Gordon Brown always highlights the 'challenge' of the Indian and Chinese economies in his keynote speeches, and is pouring subsidies into company training as a response.

Panics are rarely a good basis for policy-making; and this one rests on some serious misconceptions about how economies grow. Of course, by virtue of their sheer population size, the emergence of China and India as major industrialised powers is a globe-changing event. But the idea that everyone else has to try and produce more and more of anything and everything is not merely wrong but perverse. It is worth remembering that we have been here before.

In the 1980s, Japan was the West's feared rival. A group of visiting French politicians concluded that they had to catch up with Japan in terms of high school graduation rates, and an 80% target for baccalaureat completion was duly adopted. Since then France has put an enormous effort into raising secondary completion rates, including the creation of a range of work-related technical and vocational bacs. But it is not obvious that these measures have done very much for the economy. For the past 15 years, unemployment rates have been well above the OECD average, especially among the young. And in any case Japan is no longer anyone's top choice for an economic scare story.

The successful launch of Sputnik in the 1950s convinced the US that it was falling disastrously behind the USSR, and led to a huge programme of science and maths reform in schools. For all that, it still languishes in international comparisons of schoolchildren's performance on maths tests, scoring well below the 'Asian tiger' economies or the OECD average, a position apparently quite at odds with its leadership on productivity growth.

As for the UK, it has spent almost 150 years, since the 1867 International Exhibition in Paris, agonising about the inadequacy of its technical and engineering education, and the terrible effects this has on the economy. The 1884 Report of the Royal Commission on Technical Instruction warned: "Our most formidable assailants are the best educated... whilst we have advanced, they have advanced further still; they have driven us from several of their domestic markets and they are sharply competing with us in the markets of other nations."

The latest UK government reports now add China and India to Germany in its list of economic rivals to fear and emulate. In every other way, the analysis remains extraordinarily similar to that of the 19th, let alone 20th, century. Meantime, the UK economy is still standing and indeed doing rather well, with positive economic growth in every quarter since 1993, and real GDP per head moving from below to significantly above that of France, Germany and the Western European average.

Of course, any advanced economy requires a highly educated workforce, including people with mathematical, scientific and engineering expertise. How else is it to run its power stations, airlines and IT systems, or staff its hospitals, let alone establish and maintain a competitive financial services sector, or develop cutting-edge software or machine tools?

This is why the idea that more engineers and more scientists must be A Good Thing is so seductive. The rapid expansion of Asia's universities simply provides new ammunition to those who argue that increasing the supply of educated people, or 'human capital', is a precondition for economic survival and a priority for government action.

Before unpicking this argument, let us first look more closely at those engineering numbers. China and India are, after all, extremely large countries: over a billion people each compared with the US' 300 million, the UK's 60 or Germany's 80. They are also growing extremely fast, in a way that means their internal occupational structure is also changing rapidly. So, of course, they have a large number of new job openings for people with technical skills of various sorts, including engineering but also, for example, book-keeping and accountancy. If they are to become developed countries, they have to produce more engineers (and doctors and pilots) in total than the US or Europe. Throwing raw numbers around, without reference to the population base, is misleading.

Second, these figures do not compare like with like. Given that 10 years ago, China sent less than a million students to university, it is unlikely that the country has the teaching staff able to deliver science and engineering education at a high enough level in all its faculties; and nor does it. Many of its engineers take courses at diploma or sub-bachelor levels - which is also, of course, entirely appropriate to requirements.

China, as everyone knows, is the dominant economy in the world for mass production of cheap consumer and manufactured goods, producing, for example, 70% of the world's photocopiers and a quarter of its washing machines. Consequently, it needs a lot of technicians, not least to maintain the machines in its factories, almost all of them imported from elsewhere.

But even supposing that we get the numbers right, and India and China still produce more graduate engineers per head than we do, so what? Is boosting the numbers of science and engineering graduates an important or appropriate priority for a government concerned with the economy's future competitiveness? Or might it be a highly inappropriate one?

Back in the days of hunting and gathering, everyone's economy was pretty much the same. And agrarian villages were largely self-sufficient, give or take a little trade. They were also enormously poor. The mark of today's globalised economy is that not only people but countries diversify and trade, and are far richer as a consequence.

As noted earlier, without high-level mathematical, technical and scientific skills, it is impossible to develop and maintain a pharmaceutical industry or develop cutting-edge software or machine tools. This is perfectly true, and it is also true that very few, if any, countries do all of these at any one time. How many Germanies, producing top machine tools, does the world need? How many Switzerlands, with massive pharmaceutical companies, able to underwrite today's drug trials, can there be among the world's smaller nations?

If you ask politicians whether strict economic plans and targets work, they will almost all say no. Yet when it comes to education and training, their actions imply the opposite. Throughout the developed world, politicians, employers, trade unions and much of the press look at the changing world economy and conclude that we need to take action, set targets for university participation and, above all, produce more scientists and engineers to feed technological innovation in the 'knowledge society'.

Germany is typical, with then Chancellor Gerhard Schroder setting a target of 40% university participation as one of his key policy responses to economic stagnation in 2004. The UK goes one better, with an official 50% goal. In other words, it should produce growth by increasing inputs: only this time round, unlike the old planned economies, the inputs will be educated people rather than investment in plant. Unfortunately, when you plan centrally and ask for numbers, numbers is what you get. The Kremlin, under President Leonid Brehznev, ordered and got plenty of tractors. They just didn't work.

In the case of higher education, the pursuit of quantity has meant larger and larger universities, but less and less real public spending per student. Take a look at almost any large public university in Europe and the physical impact of budgetary constraints is clear. It is hard to believe that there has been no comparable impact on the quality of teaching and degrees.

Yet there is no obvious relationship between a country's growth rate (or income per head) and the proportion of the population entering higher education. This is true whether you look at the world as a whole, or at developing countries individually, or at the OECD. Richer countries, on average, send a larger percentage of their young people to university than poor ones because they can afford to and because they need many educated people. But within the group of developed nations, the richest per head (Switzerland) has the lowest university participation rate, while some of the poorest and economically least successful developing countries have high university participation.

Research consistently shows that populations in countries such as the UK and US are 'over-educated', meaning that qualification levels are well above what the job market demands. In a survey by the Department of Education and Skills, Work Skills in Britain 1986-2001, only 17.3% of those sampled said a degree-level qualification was required for their job.

So why is education seen as a sure-fire way to promote growth? In large part, because educated people earn more. This suggests they are more productive - from which it is easy to jump to the conclusion that if you educate more people, they will be more productive (and earn more) too. However, a lot of that earning premium reflects differences in people's underlying ability, plus the tendency of employers to use formal qualifications as a sifting and shortlisting tool.

So education is highly desirable for an individual who wants to get ahead in life, and this can produce a spiral of competitive diploma-gathering. It does not mean that keeping everyone at school for an extra year would increase productivity one jot. Should we then just forget about education as anything more than a consumer good, or a way of sorting people into jobs in a socially acceptable way? No. Education matters for the economy; but in developed countries, the way in which it matters most is under threat from the obsession with quantity.

A growing economy is one of creative destruction. Companies emerge and vanish at speed because success is so closely tied to innovation. And the innovators in our societies are, on the whole, highly educated and the product of high-quality universities. Silicon Valley, close to Stanford and UC Berkeley, is the model, but the phenomenon is far more general: hi-tech companies and research labs cluster around each other.

Above all, a country needs to create and protect universities that are truly top class, and at the cutting edge of research and theory. Political pressure too often produces 'equality' in the form of access to university guaranteed to anyone with the relevant secondary diploma. That way mediocrity lies.

World rankings of universities, such as the annual Times Higher Education Supplement list, show that the best institutions are concentrated in just a few countries, all of which encourage competition between and inequality among universities (see box). The US comes top, of course, but what is equally striking are the absences. Egalitarian Italy and Germany, for example, are not there at the top. They once had great universities - and also, once, generated technically innovative, world-beating companies.

However, there is no question as to which part of the world produces the highest quality research. The developed world remains ahead of the developing countries in orders of magnitude on any indicator of research quality, such as science citations (see box). Equally, competition can improve the quality of everyone's research and, as a result of innovation, applications and the whole world's well-being.

Of course, countries should also offer good basic education to everyone, as part of a commitment not just to equality of opportunity in the job market, but to citizenship, culture and quality of life. But in economic terms, what matters most is the development and preservation of research excellence.

SCIENCE CITATIONS, 1997-2001
Country No of Citations per million
citations inhabitants
India 188 0.18
China 342 0.26
US 10,851 365
UK 2,200 370
Germany 2,500 300
Japan 1,852 150
Canada 1,164 350
Sources: Demos, The Atlas of Ideas (2007); Science Citation Index

THE WORLD'S TOP UNIVERSITIES, 2006
Country/region Number in top 100
US 33
UK 15
EU ex UK 20
Switzerland 5
China 2
India 2
Source: Times Higher Education Supplement

Alison Wolf is the Sir Roy Griffiths professor of public sector management at King's College London.

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