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:
