Why Competition Is Good for U.S. Colleges

Rapid growth in Asia and the Middle East has led many to conclude that U.S. economic hegemony is ending. Now one might ask if the same is happening to U.S. academic hegemony, as these regions make impressive investments in higher education.

For the moment, the United States still dominates, more decisively than it ever did the economy. America may produce 25 percent of the world's economic output, but it accounts for 40 percent of global spending on higher education and 35 percent on R&D. In 2005, it devoted 2.9 percent of its GDP to postsecondary schooling, while the EU, Japan, China and India spent less than 1.3 percent. Meanwhile, of the world's top 20 universities, between 12 and 16 (depending on how you count) are American.

Yet there are signs that U.S. pre-eminence may be softening. In the past two decades, thanks to the liberalization of student exchanges in the EU and aggressive recruiting by Australia and Singapore, the U.S. share of international students has dropped from about half the total in the 1980s to a third today.

At the same time, China has begun making staggering investments in its top schools; in Shanghai, for example, Fudan, Shanghai Jiao Tong and Tongji universities have all developed sprawling new campuses. The Gulf states are starting to spend hundreds of millions on branches of leading U.S. and European institutions. And perhaps most ambitiously, the Saudis are about to open the new King Abdullah University of Science and Technology with an endowment of at least $10 billion.

Catching the United States won't be easy. Harvard, Yale and Columbia are all developing new campuses, and Yale's capital budget for the next five years alone is more than $3 billion.

Ultimately, however, the reputation of universities is measured by the impact of their graduates and the contributions of their faculties. A rising school can move the first needle more quickly than the second. There's no shortage of smart students in China and India, and plenty of potential in the Middle East. But attracting and developing world-class researchers is a slow process. First-rate scholars prefer to work close to one another. "Start-ups" like Stanford and the University of Chicago took half a century or more to make it into the ranks of the nation's best.

Schools in Singapore, Hong Kong and mainland China are now trying to establish themselves in analogous ways. Both Fudan and Peking universities, for example, have persuaded top scientists from Yale to split their time between labs in China and the West, in the hope that the younger faculty who work with them will develop into world-class scientists themselves.

Yet the West needn't panic; such arrangements show that the rise of the rest is an opportunity, not a threat. Globalization is a positive-sum game in education, as it is in economics. While Asian universities and their Western collaborators may profit from new arrangements, so does everyone else, since knowledge is a public good that other scientists and engineers can use.

The same argument can be made about strengthening education in places like Africa and Latin America. In an increasingly interdependent world, the capacity for cross-cultural understanding is becoming ever more important. Achieving it is best attained by providing students with overseas experiences, often at foreign universities, as part of their courses of study. As educational programs elsewhere improve, so will the international experiences of U.S. and European students.

There are other, less private gains. Better education around the world also translates into better-informed citizens and more-productive work forces. Everyone profits from the open exchange of information and goods. And solving the most important problems confronting us today—poverty, infectious disease, nuclear proliferation and global warming—will require international cooperation. Having better-educated global citizens can only help.

So how should Western universities respond to the rise of the rest? Already we've begun to experiment with franchise operations, setting up programs in the Middle East, China and elsewhere. Yet such programs, while valuable for the host regions, may risk damaging the reputation of the parent institution if top faculty can't be recruited for them. Greater virtual participation by professors at the parent campus may mitigate this risk.

More broadly, we should remember that increased competition is a good thing. The list of the world's top 20 universities is likely to change in the years ahead; Singapore's National University, to name one, is already within striking distance, and China's Peking and Tsinghua universities will get there soon. America's great universities should welcome the newcomers and recognize that the whole world will benefit from their success.

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