Implications of China and India’s expanding higher education

China and India together represent more than 35% of the global workforce and each country is seeking a transition from a low-skill equilibrium to high-skill ecosystems – although India will continue to co-exist with large numbers of lower-skilled jobs – according to David Finegold.

Speaking at a conference in Adelaide organised by the National Centre for Vocational Education Research late last month, the noted Rutgers University senior vice-president for lifelong learning presented contrasting descriptions of how China and India were tackling the manifold problems facing both Asian nations.

Finegold used this to point to the implications their growth and rapidly expanding higher education systems had for America, Europe and Australia.

Historically, China and India had been in a low-skill equilibrium with a large majority of unskilled workers and few jobs available for graduates, he said. Today, that state had been destabilised by globalisation, and a growing percentage of the population wanted to move along a high-skill path although many were denied access.

“The public education systems in both countries are unable to meet the demand, though that is a much greater problem for India," he said. “Failure to address this problem risks undermining the success India has already achieved.”

The case of China

Finegold said China was now making major investments to shift to an innovation economy, with the aim of becoming a global leader in green and other high-tech industries, through a dramatic expansion of its research universities. Along with a huge growth in scholarly publications, the new innovation strategy had set an ambitious target of two million patents to be created within the next three years.

He said China was now entering the second phase of its higher education development.

In the first phase, the focus was on quantity by rapidly increasing the number of students. But growth was so rapid – from 600,000 to more than seven million graduates a year – that the supply of graduates had outstripped the number of high-skill jobs.

Concerned about the potential for unrest that a large number of unemployed or under-employed graduates could cause, starting around 2007-08 the focus in China had switched to improving quality and to internationalisation, Finegold said.

Last year, the government began heavily investing to upgrade its top universities while also inviting foreign universities to establish campuses in China with local academic and financial partners.

One particularly successful model was the 2006 joint project near Shanghai between Xi’an Jiaotong and Liverpool universities. Despite tuition fees of US$9,500 a year (high by Chinese standards), the campus had enrolled 4,000 students, with 750 undertaking their studies in Liverpool. Nearly all of the first graduating class went abroad for postgraduate study.

US universities involved in developing joint campuses in China included New York, Yale, Wisconsin, Berkeley, Kean and Johns Hopkins. These joint venture or branch campus models were enabling Chinese students to receive degrees bearing the foreign university’s name or with some students pursuing double degrees, Finegold said.

Provincial governments and Chinese philanthropists were offering attractive financial terms and providing land, fully equipped campuses and start-up funding to foreign institutions interested in establishing a base in the world’s most populous country.

The Chinese government wanted to study and learn from top models around the globe and was encouraging competition among its provinces and cities. In addition, China was aiming to retain some of the 150,000-plus Chinese students now studying in the US while attracting international students to China.

Then there were the long-term consequences for the country’s one-child generation, which was likely to mean that China would become the world’s first nation “to become old before it became rich”, Finegold said.

The population of Chinese 15- to 24-year-olds was expected to fall from 250 million in 1990 to around 150 million in 2030 – a decline of 100 million, or 40%.

The case of India

India, on the other hand, had a “reverse population pyramid” with a huge and growing number of young people, while it was also the reverse of the Chinese model in terms of a services versus manufacturing-led economy, a large but relatively ineffective versus a strong state, and difficulty mobilising its resources.

The nation now had more than 550 million young people under the age of 25, in marked contrast with Northern Europe and its leading Asian rivals, China, Japan and South Korea.

The expanding young population created huge opportunities for growth in a global service model, Finegold said, but also meant there was an imperative for rapid reform. India could not afford to leave this generation unskilled and nor could it neglect the large majority now in the workforce who were unqualified.

India was producing uneven quality among its new higher education graduates and a growing gap between the educational haves and the have-nots, he added.

The government had responded with an extreme form of affirmative action, reserving nearly 50% of all higher education places for under-represented groups, but not dealing with the underlying source of the problem.

“High quality, low-cost talent has been the key to India’s recent service-driven economic success,” he said. “Yet India’s skill-creation system suffers major issues at all levels with lower levels of educational participation and investment than many developing nations.”

There were signs that the current education system was not working: even the very poor were increasingly opting for private schools instead of free public education; the small vocational education sector catered for 3% of the population yet its capacity was under-utilised; and there had been an explosion in the growth of private higher education institutions that were mostly unregulated and of low quality so that 80% of their graduates were “unemployable”.

Finegold said it was initially thought that India’s primary barrier to providing the skills it needed was insufficient resources and that it could not afford universal primary education. But there was evidence that suggested this was no longer the case.

“I’m now convinced the key issues are system design and politics,” he said. “India needs to create the right incentives and a regulatory framework while mobilising the political will to implement fundamental reforms.”

How well China and India addressed their skill issues would have major implications for the rest of the world, he said.