Education is traditionally valued as a social good. Yet, the economic necessity in expanding higher education in the developing world makes it essential for every one of us to re-think the current practice.
Down through recorded history the private sector has driven economic growth through innovation, which in turn, drives human and social progress — from the industrial revolution to the IT revolution.
I invite policy makers and opinion leaders in Indonesia to review the following article from the Harvard Business Review regarding the value that (supplementary) private education initiatives can bring to emerging nations. The article demonstrates the direct correlation between investment in higher education and economic growth and subsequently for social progress. Emerging economies however require increasing government investment in infrastructure and civic and social services – these stretch the budget available for education. The private sector can bridge the gap, increase educational opportunities while creating the skilled workforce needed to keep pace with growth.
In most emerging economies, there is a direct correlation between the proportion of the population attending tertiary education and economic growth. Education creates human capital and innovation which drive economic growth. For example, in China and India, incomes and higher education enrollments have been rising hand in hand every year. Consider that:
- The Chinese government has created a specific law, tax structure and regulatory body to support both private and foreign investment in higher education. As a result, between the years 2000-2008, enrollment in higher education grew by 21%.
- On the other hand, in India where for-profit higher education is technically not allowed, forcing private investment to adopt a work-around in the form of management companies serving universities, enrollments still grew by 7% during the same period.
With Indonesia being one of the largest emerging economies in the world, is there anything that we can learn from these experiences of other emerging economies? How can our regulatory framework be reviewed to unleash the entrepreneurial spirit of private higher education?
Putera Sampoerna
Indeed, if the production and dissemination of high quality higher education isn’t boosted by private sector interventions the developing world may face a skills and knowledge shortage that will then create a cascade effect leading to economic slump and consequently to deficits in the most elemental commodities and services.
Indonesia may soon experience a human resource shortage that will limit the nation’s ability to sustain our economic growth due to a deficit of highly skilled, globally competitive workers.
Recent research by education analyst Bob Goddard concludes the following:
“The number of students around the globe enrolled in higher education is forecast to more than double to 262 million by 2025. Nearly all of this growth will be in the developing world… The number of students seeking study abroad could rise to eight million – nearly three times more than today.”
“Average annual growth in demand for international higher education between 2005 and 2025 is expected to exceed 3% in Africa, the Middle East, Asia, Central America and South America…”
“As higher education institutions round the world embrace mobility, there is a growing awareness of the new demands and possibilities of collaboration and networking among institutions dealing with knowledge production and dissemination…”