South African economist Pundy Pillay conducted studies of three systems that successfully link higher education to development, in an effort to distil lessons for Africa. Among the key findings from the surveys of Finland, South Korea and North Carolina in the US were the needs to build higher education on a solid foundation of high quality and equitable schooling, for higher participation rates with institutional differentiation, and for strong state steering.
Other possible implications for African policy-makers flowing from the case studies are the imperatives to link economic and education planning, enable different roles for public and private higher education, connect higher education to regional development, build strong cooperation and networks, and be responsive to labour-market demands.
Pillay undertook the research for the Higher Education Research and Advocacy Network in Africa, HERANA, a large research initiative driven by the Centre for Higher Education Transformation in Cape Town, CHET. HERANA kicked off three years ago and is aimed at exploring the complex relationships between universities and development.
His report, Linking Higher Education and Economic Development: Implications for Africa from three successful systems, was one of the first publications to come out of HERANA and was produced last year. Its key findings also feature in a HERANA Synthesis Report published this month.
Finland, South Korea and North Carolina were chosen, first, for having "well-developed higher education systems comprising different types of institutions with varying impacts on development". Second, Finland and South Korea have levels of participation that are among the highest in the world, Pillay writes.
Third, in all three there is evidence of a strong, close relationship between education and economic development, and higher education and economic development in particular. "In all three systems a rethink of major economic policies was accompanied by a deliberate attempt to link higher education to economic development."
Another common thread, says Pillay, is acceptance of the knowledge economy. In Finland and South Korea, higher education planning "has been closely linked to changes in the pattern of economic development", from the production of primary commodities to manufacturing to the services sector and today the knowledge-based economy.
"In North Carolina, on the other hand, little formal state planning takes place either for economic or educational development. Nevertheless, the close linkages between the state education system, the private sector and higher education institutions have enabled the state to address the higher education challenges of industrial transformation towards the knowledge economy."
Pillay argues that although the case studies are from the rich world, African policy-makers should take note of the importance of higher education for development, for several reasons.
First, the relationship between higher education and economic development is "incontrovertible". Through education and research, higher education can enable countries to raise economic growth and increase participation in the knowledge-based economy.
Second, in a globalising world it is possible for developing countries to focus not only on production of primary commodities and manufacturing goods requiring school-level skills but also on value-adding goods and services requiring skills provided by higher education.
Such a strategy can raise growth rates rapidly, among other things enabling the government "to expand the provision of economic and social services to those trapped in poverty."
Finland, Pillay found, demonstrates that higher education influences economic development in several ways.
First, it produces 'human capital' in the form of high numbers of graduates of high quality who contribute to economic and overall development in numerous ways. Second, higher institutions - universities and polytechnics - place a strong emphasis on research and development and play a critical role in R&D and in the innovation system as a whole.
"Third, higher education is very closely linked to national development policy, particularly regional development policy," Pillay writes. Higher education covers the whole country and in a dual system, universities are charged with research and education based on it, and polytechnics with education and research geared to the world of work and to regional development.
Fourth, higher education forms the basis for a regionally comprehensive innovation system that is regarded as critical for growth and development. Fifth, institutions play a key role with industry in enhancing regional development through their support and research roles.
Sixth, recent research has shown the value of equity in stimulating growth and development. Commitment to equity in general and in higher education "must have been an important contributor to the high rates of economic growth experienced in Finland in recent decades".
Finally, the high success rates of graduates in the labour market, both in term of employment and earnings, points to high levels of 'external efficiency' of higher education and to its clear role in promoting economic growth.
South Korea also shows the critical influence of higher education on development, but there are "fundamental differences", Pillay reports.
First, the South Korean system has also responded well to the basic educational needs of the population and has successfully delivered the human resources required for industrialisation. But "the rapid quantitative expansion of the higher education system appears to have led to a lowering of quality, and limited diversity and relevance", rendering higher education unable to provide the quality human resources needed to meet the changing demands of a knowledge-based economy.
Second, strategic partnerships and connections, and institutional and organisational structures that govern such partnerships, are weak among knowledge-producing institutions such as corporations, universities and research institutions.
Third, universities have focused on the traditional mission of training scholars and leaders. "They have remained relatively passive in the practical application of knowledge and failed to respond effectively to job market realities," writes Pillay.
Fourth, South Korea has a large pool of highly educated workers. "More than 80% of high-school graduates go on to higher education, but there is a problem of imbalance between academic fields."
Fields such as law and medicine are "much preferred" to science and engineering, and Korean universities are not improving students' competencies in critical thinking, communication, self-motivated learning, leadership and problem-solving.
Sixth, the South Korean experience of economic and parallel educational development is a "classic example of the East Asian experience with catch-up industrial development," Pillay argues. East Asian economies did not see universities as agents of innovation during half a century of accelerated catch-up; rather, they were seen as agents of human capital formation.
"Current reforms in Korean higher education relating to quality, differentiation and relevance, and attempts to stimulate research capacity in universities, are designed to enhance Korean human resource capacity to respond more creatively and fully to the challenges of innovation and the increasingly globalised and knowledge-based economy."
Although North Carolina is in the world's richest and most powerful country, Pillay writes, its education system is the least developed of the three case studies.
"The schooling system faces many developing country-type challenges, particularly with regard to access and quality. Participation in higher education is relatively low compared to Finland and South Korea, and highly inequitable in terms of race, class and region."
Nevertheless, there are several features of the North Carolina higher education system that are important with respect to its impact on development, says Pillay.
First, the state plays an important role in funding and promoting engagement between higher education institutions and the private sector. Second, there is a high level of productive engagement between higher education institutions and the private sector.
Third, there are strong links between universities and other post-secondary institutions. Fourth, community colleges address the basic challenges of skills development and access for those unable to attend universities.
Fifth, universities have developed productive linkages with the private sector to enhance economic development through R&D and cultivating a culture of innovation. Sixth, there is increasing recognition that universities can play a greater role in improving the quality of schooling - "a key factor for the success of higher education", writes Pillay.
Pillay's research found nine possible implications for African countries.
1- Linking economic and education planning
Both the Finnish and South Korea systems illustrate the benefits of a close link between economic and education planning.
In Finland, this has been particularly true since policy decisions were taken to focus on the development of a knowledge economy, he argues. The link between higher education and national development has been particularly close.
"A feature of economic policy has been targeted intervention in the industrialisation process with far-reaching implications for specific categories of outputs from the higher education system, such as engineers, scientists and teachers."
In South Korea, the government has been "unashamedly interventionist in both sectors to promote overall social and economic development, with profound consequences over the past 40 years".
While in North Carolina there is no formal state planning in either the education or economic sectors, there is a "close working relationship" between state departments, the business sector and higher education institutions to achieve education and training as well as research and innovation objectives needed for economic and broader development.
2- Building higher education on high-quality, equitable schooling
Both the Finnish and South Koreans models showed "how crucial high-quality schooling is for the development of a high-quality higher education system," Pillay reports.
Although there are "serious questions" about the overall quality of the Korean higher education system, largely as a result of rapid expansion in student numbers, it has provided a large quantity of human capital to contribute to rapid industrialisation efforts since the 1960s.
In North Carolina, the quality of both schooling and higher education varies substantially and access, equity and quality need to be improved at all levels of education.
3- High participation rates with institutional differentiation
All three systems have some of the highest tertiary education participation ratios in the world, Pillay points out, and in different ways all three "provide post-school education at both the middle- and high-end skills levels". This has been achieved by combining high participation with differentiation.
In the one approach, polytechnics and universities have "fundamentally different roles", with polytechnics preparing students for practical work and universities with a more academic and research orientation, although polytechnics undertake research related to the world of work.
In Finland, as with community colleges in America, polytechnics have multiple roles including vocational and adult education and vocational education research.
In South Korea, too, there is clear and similar role differentiation between colleges and universities. "Recent years have seen the start of some institutional differentiation within the university sector, with a few institutions, such as Seoul National University, playing an increasing role in research in addition to their education and training functions," he says.
In North Carolina, there is differentiation between universities and community colleges but little within the university sector, with almost all universities aspiring to be 'world-class' research institutions.
"Differentiation within an elite higher education system contributes to inequality and high-level skills shortages in the knowledge economy, while differentiation within a high participation system reduces inequality by providing large numbers from a cross spectrum of students with wide-ranging capabilities to prepare for a range of skills and jobs," Pillay stresses.
4- Strong state steering
The state can play a dominant role in the development of effective higher education.
Finland demonstrates that the state, through funding among other means, can ensure the development of a higher education system appropriate to the country's needs.
"In South Korea, providing high-quality schooling on an equitable basis has meant that fewer public resources have been available for public higher education," writes Pillay. The development of a largely private higher education system has produced some deficiencies relating to labour market responsiveness and quality of outputs.
In North Carolina, the role of the state in higher education is of a facilitator and an important funding source. "As a facilitator it has driven important partnerships with the private business sector and higher education institutions."
5- Different roles for private higher education
In the three case studies, Pillay says, the role of private higher education institutions varies. In Finland, there has until recently been no role for the private sector. In North Carolina, the private sector is an important provider of higher education, complementing state provision.
In South Korea, the high priority given to investment in high-quality schooling left the state with few resources for higher education. "This has led to the development of a dominant private sector in higher education both in terms of institutions and enrolments."
6- Higher education linked to regional development
Higher education can play an important role in regional development, says Pillay. "In Finland, universities and polytechnics spread over the entire country work in collaboration with one another and with local government and business to ensure greater equity in regional development."
South Korea is now tackling regional development through such initiatives as the New University for Regional Innovation. "In North Carolina, equitable regional development has not been a priority. Even though higher education institutions are spread throughout the country, those outside the major cities tend invariably to be of poorer quality."
7- Strong cooperation and networks
The research found that cooperation and consensus is a key factor in policy-making and implementation.
Finland has a high degree of consensus-building and cooperation between higher education stakeholders including institutions, the government, public funding agencies and the private sector. This, along with appropriate institutional arrangements, has been key to achieving efficient and effective resource distribution and education and research outcomes.
"In South Korea, the hand of government is clearly 'visible' in all components of the education system, including oversight of the private sector," writes Pillay.
The network between ministries, public research institutions and large companies with respect to research and development has been important. Today, large public institutions "are becoming an important fourth component of this group as they develop their R&D capacity".
Important links are also developing directly between industry and universities, particularly through initiatives such as the Industry-Academia Collaboration. A third set of networks is developing "somewhat belatedly" between universities, industry and regional governments.
For its part, North Carolina shows how effective relationships can be developed between the higher education system, government, the private business sector and civil society "in order to promote economic, social and environmental development. "None of these relationships have been legislated, but they have come about through a common commitment to the development of the state."
8- Responsive to labour market demand
The Finnish higher education system has been successful in meeting the demands of its labour market, with an important factor being the state's role in providing disproportionate resources for scarce skills, Pillay found.
In South Korea, higher education has largely not been able to produce the quality outputs required for a knowledge-based economy. There is a "large divergence" between what employers seek of graduates and their skills base - possibly the most important reason why South Korea has yet to make the leap to a growth pattern in which sectors demanding high-quality educated labour dominate the composition of GDP.
There are several lessons, says Pillay. First, quality has been compromised by rapid expansion of the system. Second, expansion was accompanied by very little institutional differentiation, especially at the university level.
"Third, it was expected that the private sector-dominated system would be better able to provide human resources in line with the needs of the economy, but this has clearly not happened. The ability of the government to 'steer' the system with appropriate incentives has not been possible in a system dominated by privately-financed institutions."
North Carolina shows that higher education should be sufficiently flexible to respond to changing labour market conditions. "In the absence of state planning, the higher education system has, nevertheless, been able to respond reasonably well to changing labour market demand patterns of an increasingly sophisticated economy."
9- Positive role higher education plays in development
In Finland, higher education is closely linked to development through its education and training role as the provider of 'human capital', and in its wide-ranging roles in research and innovation. In North Carolina, it is recognised as important for development. However, says Pillay, there are numerous challenges relating to access, equity and quality that.
Korean higher education policy has long been to ensure that universities produce human capital for growth and development, but the role of institutions in research and innovation has been minimal. Technology capture, transfer and development was left initially to public research institutions and then to private companies, Pillay writes.
"This model is largely the one that prevails in Africa", where universities provide human capital (graduates) but undertake very little research and innovation.
"This raises the vexing question of why African countries have not been able to match the economic growth and development record of South Korea in the post-Second World War era. One possible answer lies in the failure of African countries to provide adequate access to good quality schooling."
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