By A.B.K Kasozi
THE first ever universities exhibition opens in Kampala today. Scholars have now established that there is a major link between higher education and economic development. Higher education enhances economic development in many ways, including the provision of human capital and knowledge needed for production and good governance.
Higher Education institutions are the centres of training the human resources needed for economies and for good governance (which is the backbone of organised society). They are the major sites of research and production of knowledge that drives economies. Therefore, universities are our future and we must not only fund them, but also give them the freedom to do their work provided they are accountable to all stakeholders.
However, African higher education systems have not been able to fully play their economic development roles due to years of financial neglect, state interference in their institutional autonomies and internal mismanagement. African countries have failed to appreciate the positive roles higher education and universities in which it is delivered play in economic development.
As a result, African higher education systems lag behind those of other continents in almost every quality indicator. It is my hope that this country will appreciate and fund universities and give them the freedom to operate well. On their part, universities must become more accountable to the public in the way they manage funds and academic processes.
Evidence
A series of World Bank funded studies have now established that the relationship between higher education and economic development is more striking than was previously accepted.
In a 1999 World Bank study, Knowledge For Development, the writers showed that there is correlation between education in mathematics, science and engineering and improved economic development. The study showed that the private rates of return to tertiary education were about 20%, similar to secondary education. In a subsequent report of 2000 that the bank co-sponsored with UNESCO, Higher Education in Developing Countries: Peril or Promise, it was concluded that higher education was critical to development.
Developing nations that failed to deliver quality education would not develop. In 2003, the World Bank Report: Constructing Knowledge Societies: New Challenges for Tertiary education; stressed the role of tertiary education in building the human capital necessary for development and advocated increases of state funding to 20% of a country’s total education budget.
In a recent study for the World Bank; Higher Education and Economic Development in Africa, 2006, three Harvard University-based researchers (David Bloom, David Canning and Kevin Chan) cite a number of studies to statistically prove that higher education enhances economic development and recommend that to develop, African governments must focus more on higher education. Their conclusions are based on the following study conclusions:
An increase in average male secondary schooling by 0.68 years raises the Gross Domestic Product (GDP) growth by 1.1%, while an increase in tertiary education by 0.09 years raises the annual growth by 0.5% point (Barro and Sala-i- Martin, 1995).
Jenkins (1995) in a UK study found that when higher education qualifications increased by 1%, annual GDP output grew between 0.42 and 0.63%
In Taiwan, a study by T-C. Lin (2004) found that 1% rise in higher education stock led to a 0.35% rise in industrial output and that a 1% increase in the number of graduates from engineering or natural sciences led to a 0.15% increase in agricultural output.
Wolff and Gittleman (1993) showed that university enrollment rates in key critical disciplines of sciences and technology are correlated with labour productivity.
A study in the USA (Bloom Hartley and Rovovsky, 2006) showed individuals with higher education levels were more likely to engage in entrepreneurial activity and more educated entrepreneurs created larger numbers of jobs than less educated ones.â€
In a World Bank study, Lederman and Maloney (2003) showed that the rates of return on Research and Development were 78%. Research and Development activities are conducted mainly at universities.
Bloom et al (2006) found a positive and statistically significant correlation between higher education enrollment rates and governance indicators, including absence of corruption, rule of law, absence of ethnic tensions, bureaucratic quality, low risks of repudiation of contracts and appropriations.
Private and public benefits
Whenever quality higher education is received, it benefits both the individual recipient and the society in which the individual beneficiary resides. The private benefits for individuals include better employment opportunities, higher wages or income, increased ability to save and invest as well as more opportunities for general upward social mobility. The public benefits include the creation of a well-trained work force, i.e., the creation of human capital for the economy such as the training of a plethora of skilled personnel including lawyers, doctors, engineers, teachers and the discovery and refinement of necessary knowledge for production.
Major export commodity
The sale of higher education services as commodities has become one of the most lucrative items in international trade.
The World Trade Organisation, through the General Agreements on Trade in Services, considers education a commodity. It is now fashionable to regard education institutions with education products to sell and students as customers. In 1998, the trade in education was worth US$30b. The figure is currently much higher. Countries with good higher education systems earn a lot of money.
For example, international education contributed US$11 billion to the US economy in 2000, much of it coming from 73% of international students who have non-US funds as their primary source of support. The UK earned £16.87b in 2003/4 from both payments to institutions and expenditures in the UK market.
In the same period, the higher education sector spent some £15.4b on goods and services produced in the UK economy. The list is endless.
Currently, Uganda is believed to be the major exporter of higher education in East African. We do not have exact data of capital inflow, but a sizeable percentage of the registered university students in this country are foreigners. What is clear is that Uganda cannot keep this competitive advantage as Tanzania has systematically improved its university systems through increased funding, regulation, reforms and offered adequate institutional autonomies to universities. Tanzania universities are now rated better than ours.
The writer is the executive director
of the National Council for
Higher Education.
To continue on Monday