The Knowledge Economy and the Globalization of Higher Education

By Dr. Beverly Barrett—  Nearly two decades into the new millennium, the pace of technological change behind globalization continues to advance exponentially.  This rapid technological progress has, in turn, necessitated the internationalization of higher education with emphasis on the development of high quality skills needed in the global knowledge economy.  In my recent book Globalization and Change in Higher Education: The Political Economy of Policy Reform in Europe (Palgrave Macmillan press, 2017), I discuss the economic, political, and social drivers of change in higher education that have facilitated the growing international cooperation on the transferability of academic degrees across the national borders of Europe.  Clearly, there are lessons to be learned from the European experience for other nations.

 

As I show in my book, with the globalization and formalization of trade based on various post-World War II agreements, the mobility of students and graduates has complemented the international mobility of labor.  In particular, in the common market of the European Union (EU), established in 1993, the free movement of goods, services, capital, and labor were allowed to promote greater economic cooperation among the member countries.  Not surprisingly, the internationalization of higher education and research scholarship within the EU soon followed.  This cooperation in European higher education recognizes the role of information technology and services in promoting economic growth, often referred to as the “knowledge economy.”  Beyond Europe, there has also been a convergence of technology and globalization, which has presented its own challenges and opportunities.[1]  Indeed, the World Economic Forum annually measures national Global Competitiveness according to the institutions, markets, and policies, including investments in human capital, which serve to determine the level of productivity across different countries.

 

Higher Education and Research Innovation in Europe

As stated earlier, the internationalization of higher education in Europe has gained pace since the 1990s when thirteen European countries decided to form the European Union (today there are 28 members of the EU).  Subsequently, other European countries joined the EU members to form the 48-member European Higher Education Area (EHEA), designed to provide quality assurance and degree recognition across Europe.  Complementarily, the European Research Area (ERA) for the EU member countries supports these objectives and advances innovation.  The objectives in higher education, for attainment and quality, are complemented by investments in research and development (R&D).

 

In addition, the European Commission established in 2010 the Europe 2020 Economic Growth Strategy, with specific national and regional targets for higher education, innovation, employment, social cohesion, and climate sustainability.  This strategy also established regional and national targets for higher education attainment (average target being 40 percent of 30-34 years-old population) and innovation (3 percent of national GDP).  Investment in research and development (R&D) is headlined to be three percent (one percent contribution from public sector and two percent contribution from private sector).[2]

Subsequent quantitative research, based on a panel data analysis of the EU countries over twelve years (2000-2012), indicates that GDP per capita is the most significant determinant of the level of higher education attainment.  Interestingly, progress toward the Europe 2020 objective of higher education attainment during this period made the substantive advances in Portugal, even though it started at a level below that of Spain’s and had more catching up to do.  This is in line with the additional findings that the structure of government, such as the difference between the unitary government of Portugal and the federal government of Spain, is an important indicator for higher education reform.

 

Political, Economic, and Social Drivers of Higher Education

In my book, I also consider the three important factors that can promote greater levels of higher education in a global knowledge economy.  First, politically, through intergovernmentalism governments can cooperate in areas of mutual interest to pursue common objectives in higher education.  Second, economically, globalization can provide through trade, finance, and labor movements, as well as through various international organizations, a greater scope for training a much more mobile and skilled labor force.   Finally, socially, as the example of Europe and Europeanization show, the top-down supranational agency can promote broad scope for harmonized educational standards across the globe.

 

Conclusion

The continued rapid worldwide growth of the knowledge economy requires a new labor force, steeped in new information technology skills and expertise.  This in turn can be facilitated by greater international cooperation in higher education.   Indeed, higher education and research innovation remain the central and impactful forces for progress on local, national, and international levels in the knowledge economy.  It is thus exceedingly important for global businesses and governments to mobilize their resources for creating the highly trained labor force of tomorrow.

 

 

Beverly Barrett, Ph.D.

University of St.Thomas – CSB, Lecturer in Dept. of Economics

Email address: barretbf@stthom.edu

 

 

[1] Baldwin, Richard. 2016. The Great Convergence: Information Technology and the New Globalization. Cambridge MA: The Belknap Press of Harvard University Press.

[2] European Commission. 2018. Europe 2020 economic growth strategy headline targets. Available from: https://ec.europa.eu/eurostat/statistics-explained/index.php/Europe_2020_headline_indicators

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