CITIES, UNIVERSITIES AND GLOBAL COMPETITIVENESS
Institute of Australian Geographers Conference
Adelaide 13-16 April, 2004.
Professor Dean Forbes
Pro-Vice-Chancellor (International)
Flinders University
Cities and universities are giving increased attention to developing international links to enhance their ability to compete for resources and investment, skilled people, and prestige. This is bringing new alliances between cities, and between universities, and increasingly between cities and universities, as each seeks to derive leverage from one another and increase their global competitiveness.
Over the last decade, Australian cities and universities have aggressively pursued their international agendas. Most of these connections have centred on international student recruitment, and have been extraordinarily successful. However, new models of city-university engagement, particularly in Southeast Asia, are throwing down a serious challenge which Australian cities and universities are struggling to match.
BACKGROUND
The research for this paper draws on my interest in the reconfiguration of the postcolonial space economies of the Pacific Asian region, and the place of the key cities within this change. I also have responsibility for the international program of Flinders University, and more recently the University’s community engagement strategy. As a result I have been involved in strategies for building the Australian higher education sector’s engagement with universities globally, but especially in Pacific Asia.
POSTCOLONIAL SPACE AND THE GLOBAL KNOWLEDGE ECONOMY
The expansion and deepening of global economic linkages has helped forge the Pacific Asian postcolonial space economy. World cities, which feature a concentrated producer services sector, have emerged as centres for the management and control of the global economy. Other large cities have competed to enmesh themselves into this network, not necessarily as centres of control, but as centres for investment and hence as key points for production (either of commodities or services, or both) or nodes of distribution (for instance, for the export of agricultural products).
One of the more exciting aspects of globalization is the changes it accelerates in labour markets as the knowledge economy begins to expand. In order to function, the global economy needs to suck-in people who are educated and skilled, good at communicating, and intellectually and physically mobile. (Karl Taro Greenfeld’s (2002) book is a personal account of how this works).
The building and maintenance of this cultural circuit of capital has had a significant knock-on affect on higher education. An outcome, and also a cause of these changes, has been increasing demand for high quality tertiary education, particularly western English-language education, an expanding number of students able and willing to pay and travel to undertake education in key universities in foreign countries, and increasingly outward looking universities.
CITIES AND UNIVERSITIES CONNECTED
Cities and universities collaborate in a many ways. These include:
• Their mutual interest in the education of the future workforce.
• Science and technology research incubators (eg science parks and technopoles).
• Joint social and cultural initiatives (eg the creative cities thrust).
• Activities which connect students and alumni with migration programs and investment strategies.
• Economic impact of spending by the university and the university community (eg consumer spending and housing).
• Direct contributions to regional development.
Although it is often largely unacknowledged, many of these initiatives contribute to the global competitiveness of cities. That is, they improve the chances of the cities being able to attract resources and investment, skilled people, and increase their prestige. My concern in this paper is solely on the international collaborations associated with the educational activities of universities. I will elaborate referring to two case studies.
THE ESTABLISHMENT OF EDUCATION ADELAIDE
Education Adelaide was formally established in 1998 (it was originally titled the Education Industry Development Council (EIDC)). It was the product of Adelaide 21’s Education Industry Development Group (1997), which prepared a report for the Premier and the Lord Mayor of Adelaide. The funding for Education Adelaide was shared between the SA government, the Adelaide City Council, and the three universities in Adelaide.
Between 1998 and 2002 its primary focus was bringing international students to Adelaide. Offices were established in Singapore, Hong Kong and Tokyo to support this. Particularly after the election of Alfred Huang as Lord Mayor in 2002, the Adelaide City Council took a very active role in Education Adelaide, and especially its activities in China. Lord Mayor Huang led a number of delegations to China, Chinese delegations to Adelaide increased in number, and support was given to the formation of a China cluster among the Adelaide business community, with education having a strong role.
The requirement for a government review of funding, combined with some rumblings of discontent with Education Adelaide’s performance, resulted in a parliamentary review and two external reviews. As a result, Education Adelaide underwent some significant changes in late 2002 and early 2003, and a new strategic approach was developed. It focused on three main issues:
• The consistent branding of Adelaide as an education city.
• The provision of information and support to those marketing Adelaide as an education destination
• The building of relations between international students and the communities of Adelaide
The question that interests me is what has been the impact of Education Adelaide’s initiatives on Adelaide’s global competitiveness?
Australian educational institutions, but especially the universities, have been extraordinarily successful, with Australian education exports totalling $A5.7 billion in 2003. Education Adelaide was created to provide leverage to South Australia’s educational institutions, which had lagged behind the eastern states and Western Australia.
• Adelaide had 2,899 international university students in 1996, or 5.4% of the Australian total (Adelaide 21 1997 p 3).
• However by 2003 international students in South Australian universities had grown to 6,507, or 4.8% of the total.
It is difficult, if not impossible, to distinguish between growth due to the efforts of the educational institutions, and the contribution of Education Adelaide, but it’s clear that the competitiveness has improved.
The more challenging question is changes in the competitiveness of Adelaide in terms of resources and investment, skilled people, prestige etc?
The fragmented governance structure of Australian cities means that while the Adelaide City Council is an active member of Education Adelaide, the other urban councils have a very limited direct role. However, the state government through three departments (Education and Children’s Services, Technical and Further Education, Trade and Economic Development,) has a key role in Education Adelaide, so the broader interests of the city are represented, although there is no single city-wide government.
A recent publication by KPMG LLP (2004), a North American part of the KPMG group, helps shed some light on Adelaide’s global competitiveness ranking. The survey included 121 cities in 11 countries in North America, Europe and the Asian Pacific region (ie Australia and Japan). It set out to measure competitive advantage in attracting business investment to the city.
Costs were determined for four sectors: manufacturing, software, research and development and corporate development. The major headings in determining the competitive advantage score:
• business costs (which includes labour wages, salary and benefits);
• cost of living (including education costs);
• the business environment (including labour availability and skills);
• quality of life (including schools and universities).
Adelaide was ranked very highly, much to the delight of the state government, which took out full page advertisements in the national press. It ranked:
• The most competitive city for business in Australia
• No 3 in the world out of 25 cities in the population range of 500,000-1,000,000 (though Adelaide’s population is in excess of 1 million)
• Overall the 10th most competitive business city in the world.
Education-related issues are significant in each of the four components of the competitiveness measure.
SINGAPORE: ASPIRATIONAL EDUCATION HUB
The second case study is Singapore. The Singapore government has several times demonstrated its capacity to think strategically, and universities have become an integral part of its current plans. Some time ago the Economic Development Board was tasked with developing Singapore into a global city. One of its strategies was to make Singapore an “International Business Hub 2000”, promoting the services sector based around clusters of activity and a service gateway to the Asia Pacific region. The prime emphasis of this strategy in the first half of the 1990s was on regional headquarters, communications, and media services clusters.
This evolved into an aim “to promote Singapore as the Asia-Pacific hub for world class university education and training” (Ministry of Information and the Arts 1997 pp 116-118). Universities were recognized as being critical in the knowledge economy, evidenced by the experience of Silicon Valley and Boston Route 128 (Cheung and Sidhu 2003 p 62). The government’s Economic Review Committee on Developing Singapore’s Education Industry stated: “The proposed vision is to develop a self-sustaining education ecosystem offering a diverse and distinctive mix of quality educational services to the world, thus becoming an engine of economic growth, capability development and talent attraction for Singapore” (ERC 2002a p 2).
The Economic Review Committee on Developing Singapore’s Education Industry (ERC 2002a p 3) is a combination of government and private sector representatives, tasked with reviewing the development strategy and generating recommendations on restructuring. The tertiary education strand envisages three tiers:
• Singapore launched its “World Class University (WCU) Programme in 1997, creating the first tier. The aim was to attract 10 world class universities to Singapore within 10 years. These were intended as niche centres of excellence, and contribute from 1,000-3,000 graduates a year.
• The second tier was represented by the public university sector which was to be strengthened around three universities – the National University of Singapore (NUS), Nanyang Technological University (NTU) and the new Singapore Management University (SMU) – and they were expected “to become top global brand names” (ERC 2002a p 3). NUS has also established overseas hubs in Silicon Valley, Bio Valley in Philadelphia and in Shanghai.
• The third tier consisted of private universities which could be local or could be foreign, would have at least as high ranking as NUS and NTU, and would focus on teaching and applied research. Singaporean students undertaking external degree programs with foreign universities in Singapore totalled 21,010 in 2000 (US Embassy 2002).
Prof Arnaud De Meyer, who chaired the Education Workgroup of the Economic Review Committee, said Singapore is to become a “global schoolhouse that offers a comprehensive continuum of learning experiences” (ERC 2002b p1).
Judging the impact of the strategy on Singapore’s ability to attract international students is difficult. The education sector was thought to have enrolled 50,000 foreign students in 2001 (ERC 2002a). However, the proportion in university studies is small, and many use Singapore as a transit stop (US Embassy 2002). One observer noted that by 2002 Singapore had not yet embarked down the path of becoming a high volume international education destination (Anonymous 2002). The introduction of a Singapore Quality Class for Private Education Providers, administered through the Standards, Productivity and Innovation Board, in 2003 is intended to facilitate
On a more general note, the Singapore government envisages a number of benefits resulting from developing its education ecosystem. The Economic Review Committee on Developing Singapore’s Education Industry (2002a pp 1-3) has argued that:
• Education contributed $S3.0 billion to the Singapore economy, or 1.9% of GDP in 2000, and this was projected to grow to 3-5% in 10 years.
• Some 22,000 new jobs are expected to be created, 13,000 of which are teaching related, and 9,000 in administration areas.
• Growth in education is counter-cyclical and hence will enable the Singapore economy to better withstand economic crises (it is believed to be one of the reasons why Australia coped well with the 1997-98 economic crisis, and the 2001-02 recession).
• It will assist competitiveness in attracting foreign talent into Singapore.
• Education growth will build a network of alumni around the world.
FIVE CONCLUDING POINTS
First, there is growing evidence of more sophisticated alliances being formed between cities (and governments) and universities. I have cited just two examples from Adelaide and Singapore. I could also have drawn on Vancouver or Stockholm, or Malaysia and China (especially Hong Kong SAR).
Second, the relationship between cities and universities take a number of different forms. Education Adelaide is a loose coalition between the state government, local government and universities. It relies on the willingness of each of the partners to finance its activities and work collaboratively towards mutual goals. In contrast, Singapore is characterised by a more strongly articulated corporatist approach. The government is more powerful, and civil society much weaker than in Australia. Moreover, Singapore as city and nation-state has greater resources at its disposal.
Third, the city-university alliances have a number of specific purposes, including increasing international student numbers, and strengthening the capacity of the universities to compete internationally. However, there is growing recognition of the importance of higher education’s contribution to economic growth and improved global competitiveness, particularly in enhancing access to the global labour market. Increased global engagement by cities and universities has serious risks (eg financial, and risks to reputation) and which may undermine the potential benefits. However, international engagement in higher education is also driven by the perceived need for universities to do this if they are to survive and prosper.
Fourth, the shifting characteristics of the global knowledge economy are driven in part by the demands of the cultural circuit of capital to build business expertise and expand and sustain the producer services, and by the greater openness following WTO activity and expanding numbers of bilateral free trade agreements. These trends have serious implications for Pacific Asia’s post-colonial space economy. The continuing growth of the major economies of the region, especially China, provides opportunities for the accelerated growth in world city status of a number of key cities in the region, such as Singapore. The need for a much expanded university-educated workforce has created a niche which Australian universities have been aggressive in exploiting. It also creates opportunities for other cities, such as Adelaide, to both facilitate economic growth, and build human capital.
Fifth, as universities evolve new strategies for international engagement (especially through different models of transnational education, and on-line international education) the possible kinds of alliances between cities and universities will expand. The new model of city-university engagement created by Singapore’s strategy to become a “global schoolhouse” is a good example. These pose a serious challenge which Australian cities and universities have so far struggled to match. It seems inevitable that more sophisticated alliances, operating across a number of bands of university activity, involving multiple layers of government, and in many cases multiple institutions, will be needed to facilitate the global competitiveness required.
REFERENCES
Adelaide 21 Education Industry Development Group 1997 Adelaide 21. A Co-ordinated Strategic Approach. Business Development. Education, Adelaide
Anonymous 2002 “Singapore as a global education hub” Education: Singapore’s Knowledge Industry Journal, Dec 2001 - Jan 2002 (www.eduasia.com.sg/archieve) accessed 2/2/04.
Cheung, Wing-Leong and Ravinder Sidhu 2003 “A tale of two cities: education responds to globalization in Hong Kong and Singapore in the aftermath of the Asian economic crisis” Asia Pacific Journal of Education, Vol 23, No 1, pp 43-68.
Economic Development Board 2003 A Framework for Economic Development in South Australia, Adelaide.
Economic Review Committee on Developing Singapore’s Education Industry, Services Industry Subcomittee 2002a Services Industry Subcomittee, Economic Review Committee on Developing Singapore’s Education Industry 16 September 2002, Singapore Parliament. (www.channelnewsasia.com/cna/parliament) accessed 2/2/04.
Economic Review Committee on Developing Singapore’s Education Industry, Services Industry Subcomittee 2002b “Developing Singapore’s education industry” Singapore Parliament. (www.channelnewsasia.com/cna/parliament) accessed 2/2/04.
Greenfeld, Karl Taro 2002 Standard Deviations: Growing Up and Coming Down in the New Asia, Villard Books, New York.
KPMG LLP 2004 Competitive Alternatives: The CEO’s Guide to International Business Costs, KPMG LLP Strategic Relocation and Expansion Services (www.competitivealternatives.com/report/default.asp) accessed 3/3/04.
Ministry of Information and the Arts 1997 Singapore 1997, Singapore.
SABV 2010 (South Australian Business Vision 2010) 2003 Indicators of the State of South Australia 2003, Adelaide.
US Embassy 2002 “Singapore’s education system: adjusting to a knowledge-based economy” (http://singapore.usembassy.gov/ep/2002/Education2002) accessed 2/2/04.