Meeting Friday October 28, 2005 at University of Copenhagen
Internationalisation at home
- The future of the University of Copenhagen in the
global knowledge society.
Topic: The global market for higher education – an Asian
perspective.
By: Ambassador J. Oerstroem Moeller,
Visiting Senior Research Fellow at Institute for Southeast Asian
studes (ISEAS), Singapore
Adjunct professor at Copenhagen Business School.
www.denmark.com.sg/jom.htm
Prelude.
The old poodle, the Leopard, the Monkey.
Key messages:
- Economic and technological power. Shift from North America to Asia.
- (Higher) education. Exponential demand. Main future industry.
- The future University. Multinational company, alliances, M & A.
Breaking up.
- How does it all link together.
- Globalisation. We take it for granted - but suppose it isn't.
I. Global trends controlling higher education.
a) The economic gravity moves from goods to the immaterial
economy – service, entertainment, audio-visual world, infocom,
dream society, education.
b) Consumption patterns changes from price and cost to values, set
of values, ethics, preferences – do we share the same basic attitude.
c) Consumers cease to be just that. Changes into an asset base for the
enterprise taking a part, an interest, engage themselves in the
evolution of the enterprise, congruous set of values. They become
capital value to be listed on the asset side of the balance sheet.
d) Staff becomes dichotomised. A transfer market for the best and
the brightest (greed). A wage squeeze for the water boy (survive if
you can). In short: Enterprise-staff becomes Economics/Costs. Earn
the money to keep the best brains; put the wage
squeeze/entrenchment on everybody else so they scream.
e) Political system. OUT  National perspective – consensus –
traditional welfare – take care of each individual. IN  International
perspective – values – market – opportunities for each individual.
Bush/Blair continuation of Reagan/Thatcher or the crowning touch
that augurs a new political cycle?
II) Economic shift.
Keywords. Follow the money trail from US to China and India.
a) Measured in official exchange rates Chinas share of global GNP is
about 3%, India about 1,4%. BUT PPP gives about 13% respectively
about 7%. China & India equals 80% of US GNP. Add in Japan,
Korea and Southeast Asia and you get to 125%.
b) China is the factory of the world, price setter for industrial goods
and offer technology. PPP second largest economy, largest recipient
of Foreign Direct Investment (FDI).
India is the service center for the world, price setter for service
goods and offers solutions. Fourth largest economy (PPP).
c) The middle class will be decisive.
China. Number of urban households annual income  USdollars
5.000  17,4% in 2005  90% in 2014. Annual increase 24%.
Few people realises what global cities signifies. Trendsetters live in
global cities. At ease inside this cultural framework. The
Hubconcept. Branding, Shanghai, Beijing, Guangzhou-Hong KongMacau, Mumbai, Kolkatta, may be Tokyo. Subhubs Bangkok,
Saigon, Singapore-Johore, Sydney. Many more. Centre-PeripheryHinterland.
III. Technological breakthroughs.
Keywords. CultureTechnology. Total communication everywhere,
everybody, anything. Pictures, symbols, text, talk  Syme. Nomads.
China 402 mio subscribers on mobile phones end 2005. Fixed line 360 mio.
About 103 mio on internet. Broadband user 2005: US 39 mio, China 34 mio.
Prognosis for 2007. China 57 mio – US 54 mio. SMS China 6 billion in ONE
DAY! New language emerges.
India 60 million subscribers on mobile phones. 2 million more every month.
Prognoses 2010. China globally number one PCs 178 mio. India 80 mio.
Cernet2, IPv6. 3G technology.
EU-Commission forecast. About 2010 China surpasses EU  R&D as per
cent of GNP.
IV. Education.
Keywords. Exponential rise in demand. Primarily from Asia. Market forces.
a) Economic development (rising incomes, middle class) combined with the
Asian cultural tradition (e.g. Confucianism) stimulates demand almost
enormously.
Foreign students in English language universities are approx 1 million.
Forecast says 2,6 mio in 2020. 56% of all foreign students from Asia.
Forecast for 2020 says 75%.
b) US after September 11, 2001 became secluded. Looks upon the outside
world as a threat. Until now US has profited from an open attitude. For the
last three academic years number of foreign students in US has fallen
between 6 and 10% compared to a rising number the years before. Latest
academic year a fall of 8% from China and 4% from India. In year 2000
6.250 Indonesian students in US. Last year 1.333.
The Japanese system is inward looking. Language and culture. Problem as
the number of students are falling.
c) New suppliers. UK, Australia, New Zealand. An example: Students from
India to Australia 2.800 in 2001-2002 but 9.000 in current academic year.
Malaysia (40.000 to 100.000 plan or pipedream?)
The numbers – does it matter? The international market for higher education
is estimated to 2.200 billion USdollar – more than ten times Denmark’s
GNP. Education is New Zealand’s number 4 industry. Australia gets 25
billion DKK from education. 1/3 of Nobel prizes to US to immigrants.
d) According to anecdotal evidence many small and medium sized American
universities faces financial difficulties. Among other things because of the
short fall of foreign students oiling the American universities.
Illustration. One of the fastest growing business` with 20.000 customers and
a revenue of 2 billion USdollars is Indian tutors helping American high
schools students with their math. Website just in case:
www.cbseguess.com/tutors/default.asp
V. The Universities.
Keywords. Market – again! Benchmark. Alliances. Multinational company.
M & A. Individual institutes cast off the skin and go themselves.
One ring to rule them all: James Bond! George Patton!
a) Universities do not any longer get a nice big sack of money from Father
Christmas to spend how they like. They must be able to find the finance
themselves. Sell their products. Concentration. Nothing succeeds like
success, nothing fails like failures.
Staralliances. To benchmark, to take control of the market, to force others to
follow and adapt after having made the breakthrough ourselves. The newest
one consists of ten universities. Copenhagen University among them.
BRAVO.
b) Multinational company. Strategic alliances. Market share.
1) Establishing yourself abroad. Singapore: Two universities make
campus there. China: Several universities moving in.
2) Attract students to our campus.
Intellectual multinational company attracting students to its home campus,
exporting its structures to other countries.
Next step. Mergers & Acquisitions. Not really seen yet but it will come.
University A buys part of or the whole of university B. The same pattern as
for traditional multinational company (do it better, sell off the assets, select
the golden egg).
c) Staralliances between institutes inside the universities running
against the traditional structure of the university. The institutes
able to sell ´products´ will not be willing to finance the institutes
not being able to do so.
d) Off shoring. Multinational companies (e.g Boeing, Dupont) ask
for bidders to solve their R & D. Not any longer going
automatically to R & D unit of the company itself. Everybody
can supply a bid. More than 100 labs in Bangalore base their
activities on this kind of off shoring. Savings and a higher much
higher degree of imagination for the enterprise.
Illustration. Boeing 7E7 (the dreamliner) wings and fuselage.
Medtronics.
Take a look at www.innocentive.com.
e) The unanswered question. The university using the net?
VI. What links it all together.
Keywords. Values and economics (costs, savings) in new roles.
Virtual structures. Identity becomes more fluid. Join those with
identical values regardless of where they live.
Virtual enterprise, virtual university, supranational. Controlled by:
Values. Students link to the university having congruous values as the
customer links to an enterprise having congruous values. You look for
those driving in the same lane.
Capital. Amount of money to keep the talent determines whether you
are in champions league to compete on ideas or in division 4
competing on price and costs.
Costs. If compete on costs ruthless battle to suppress wages.
Outsourcing.
Enterprises and universities will break up from inside because of off
shoring and out sourcing.
The basic parameters become less national, more international.
Loyalty, identity, solidarity out of geographical straitjacket and
traditional structures. Values.
Look at USA religion.
Look at El Qaeda.
VII. Globalisation.
Keyword. Globalisation primarily almost exclusively an economic,
technological logistically phenomenon. Not having made its mark
on our mentality..
a) Globalisation undoubtedly produces a higher growth than any
other model. Most people accept to give up some of their identity
to get a share of that higher growth.
What happens if or when the growth starts to splutter and/or
inequality deepens so that a rising number of people do not get a
lift in their living standard. We sold our soul for…..yes for what?
All figures suggest that inequality is rising. My forecast is that after
almost 15 years as a golden age, growth will start to fall at least in
the US.
b) What are the danger signals
- Elite versus majority of population.
- Politicians starting to ask ´could another model works as well?`
- People starting to ask the same question (where is the beef for
us?)
- Rich and well educated or poor and poorly educated. Latest
anecdotal evidence from US.
c) We have taken globalisation for granted because it has been the
only model and an enormously successful one since 1945. But
recent events e.g. France in Europe, the stronger nationalism in
the US and in Japan (Japan versus China) shows that this is not
the case.
Today’s shiver:
Globalisation at a climax in 1890’s. Global depression in the
1930’s.
War unthinkable, written around 1900. World War I starts in
1914.
Civilised humanity, what the historian Barbara Tuchman called
‘The Proud Tower’ around 1900. Interwar period evil ideologies
worshipped mass murder and practised it.
d) What are the alternatives?
Let us hope that NOIC will not carry the day. That our
politicians are wise enough to detect danger signals (Those who
understand the language of the birds can become minister).
Who are we?
J. Ørstrøm Møller
www.oerstroemmoeller.com