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Yale has a similar facility at Peking University in Beijing, where Prof. Xing-Wang Deng directs a program studying the biology of plant systems, aimed at improving crops. Like Xu, Deng is a graduate of the institution where he performs his research. But it is only a matter of time before China starts to set up similar facilities for outstanding foreign scientists who have no prior connection to the country.

Given NEWSWEEK's rankings, it's not surprising that nations seeking advancement are looking closely at America's research universities as a model. Since the beginning of the Industrial Revolution, technological change has been the principal source of economic growth and a rising standard of living. But in the past half century, technological progress has become dependent on scientific advances and their translation to practice--a process that requires both public and private investment. After the second world war, the United States recognized that maintaining its leadership in defense technology required substantial public investment in university-based science. By the mid-1950s the United States had designated public support for university research for the basic sciences as well as for health, agriculture, defense and energy.

As a result of its strength in science, the United States has consistently led the world in the commercialization of major new technologies, from the mainframe computer and the integrated circuit of the 1960s to the Internet infrastructure and applications software of the 1990s. The link between university-based science and industrial application is often indirect but sometimes highly visible: Silicon Valley was intentionally created by Stanford University, and Route 128 outside Boston has long housed companies spun off from MIT and Harvard. Around the world, governments have encouraged replication of this model, perhaps most successfully in Cambridge, England, where Microsoft and scores of other leading software and biotechnology companies have set up shop around the university. An impressive array of technology companies already surrounds some of the major campuses in China--notably Peking and Tsinghua universities in Beijing, and Fudan and Shanghai Jiatong universities in Shanghai.

Universities are also adapting more American research practices. Until recently, for instance, Japan allocated research funding in block grants, which wound up in the hands of the country's most senior--but not necessarily most productive--professors. But between 2000 and 2004, the country increased the volume of grants subject to competitive review by 57 percent, in an effort to direct funding to the more meritorious.

Even more-dramatic changes are taking place in China, where a number of leading universities, intent on attaining world-class status, have been carefully studying America's top institutions for new ideas. These include widening the search for new faculty well beyond their own graduates, establishing rigorous standards for awarding lifetime tenure and consulting with independent experts on personnel decisions. Several leading universities have ditched the traditional specialized undergraduate curriculum for a year or two of general education followed by free choice of a major field of study, as is common in the United States. Some are experimenting with using criteria other than national exams to admit students. And many elite universities are determined to abandon recitation in favor of classroom interaction that encourages students to think independently--a hopeful sign for those eager to see a fully democratic China.

Indeed, China is intent on playing all its cards. By investing heavily in research, tripling university enrollments between 1998 and 2004, and encouraging top students to think independently, the country is self-consciously using its universities as a means to stimulate economic growth. At the same time, since Deng Xiaoping first permitted Chinese students to seek education in the West in 1978, no country has made a more deliberate effort to send its most talented students abroad for a top education--especially at the graduate level. Today, in contrast to 10 or 20 years ago when economic opportunity was limited at home, most Chinese students return after graduation--often with an appreciation of the values of a free society and a greater understanding of the countries where they studied.

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