Singapore's graduates leap into work

As the job market becomes more competitive, MBA graduates need to "sell themselves," to clinch top jobs globally.

Michael Melcher, a New York partner with Next Step partners, who has conducted training workshops with a number of Ivy League universities, says focusing on soft skills can add value to a student's appeal.

"I've worked in a lot of top schools in the US and Europe, and most of the MBA students need a fair bit of work. Most of them have made huge investments, time and money to get a MBA degree. But most do not know how to market themselves," adds Mr Melcher.

"So we need to work on their soft skills, to help them tell their story to the employers in a convincing manner. At the end it doesn't matter whether you come from Asia or the US, you need to transcend your local levels, and be able to have a global impact."

This is especially true to the MBA students coming out of Singapore, who are a blend of local and foreign graduates. Even though the buoyant economy coupled with a tight labour market has brought about good employment opportunities, the universities admit it is important for their business schools to find quick job placements for their graduates. As a result a lot of resources are channeled into preparing students to be market-ready.

"MBA is an investment. The opportunity costs are high especially for full-time students who quit their jobs. They are looking for a return on investment (ROI), a career progression or a career switch. Thus, through the career services we equip them with soft skills to assist them," says Ms Tan from the NTU business school.

Ms Tay from NUS agrees: "It is who you are and not what school you come from that matters. What we do at the careers services is create an environment where we can prepare our students to be ready for the market. Whether the economic times are good or bad, every company wants the best candidate for the job. We give the students the grounding to articulate their abilities when they meet an employer."

Leave comfort zone to gain cultural versatility

Leave comfort zone to gain cultural versatility I REFER to the report, 'More secondary students to go on overseas stints' (ST, Sept 13). While I am heartened by the move to have more school children go abroad, I believe it requires more than a short stint of overseas experience to instil that 'global thinking' and 'cultural versatility' espoused by Education Minister Tharman Shanmugaratnam.

For students to be truly able to absorb this global mindset, it will take at least three to four years of study abroad. This is because part of this mindset encompasses the need to network and forge deep and meaningful relationships with foreign counterparts, by having common life experiences and growing and developing together. This is not easily achieved by venturing abroad for a few weeks or months.

Sometimes, even pursuing an entire three to four years of tertiary education is no guarantee of this global outlook and mentality.

As pointed out in another article, 'Singaporeans stick together overseas' (ST Life!, Sept 13), there is not much global networking if students stick to their own cliques and associate only with other Singaporeans.

By all means, students should plan for overseas stints or even seriously consider pursuing their higher education abroad. But to think that doing so will naturally instil a global mindset is a misconception.

It requires each individual student to move out of his comfort zone and make a conscientious effort to appreciate each other's cultures and values.

Only then, in the words of Mr Tharman, can students truly 'understand differences around the world and turn them into opportunities'.

Tony Tan Song Huat

Chasing Cash; University treasuries used to be sleepy and slow. But now the race to pile up money is on.

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It was clear the good times were over. After the dot-com crash, University of Washington treasurer V'Ella Warren saw that record growth in the college's endowment was finished without a professional at the helm. "I believed that going forward, markets would be tougher," she says. "To increase returns we would have to be smarter."

So Warren did what a growing number of college treasurers are doing: she hired a blue-chip-fund manager from the private sector--in this case, Keith Ferguson from Fidelity Investments. Since Ferguson's arrival in January 2005, the UW's fund has delivered an annual return of 14.7 percent and grown to $1.7 billion. It now ranks as the 32nd largest endowment in the United States, and proves how far the endowment-growth boom has spread beyond the famous successes of Stanford, Yale and Harvard.

American colleges and universities are now among the world's most admired investors. The average return on endowments rose 9.3 percent last year, down from 15.1 percent in 2004 but still better than most rivals--and enough to draw imitators. Foreign universities are now following the lead of U.S. peers, flocking to a weeklong investment seminar held each year by the Commonfund Institute, which manages the endowments of nonprofits worldwide. Cambridge Associates LLC, a Commonfund counterpart, opened an office in Singapore five years ago in response to growing Asian interest. "If you look among professional fund managers and ask who are the best investors, they'd tell you U.S. colleges and universities," says Cambridge Associates manager James Bailey. "In general, they have performed a couple of hundred basis points better than any U.S. pension fund over the last 30 years."

Nothing lures new money like high returns. Last year, American colleges and universities received $26.7 billion in donations, up 4.9 percent from the previous year. A 2005 survey by the National Association of Colleges and University Business Officers found that academic endowments in the United States are worth some $300 billion--roughly the size of the Polish economy. Growth is more broad-based than ever, with an overwhelming number of institutions boasting endowments worth more than $1 billion. Such sizzling growth is prompting many academics and alumni to wonder if endowments are bulking up too fast, particularly in risky assets such as commodities and hedge funds. "The academic community is in an arms race for larger endowments and more resources," says Tim Cook, president of Kailas Capital, a Stamford, Connecticut-based hedge fund that counts several universities as clients. "You have some large colleges returning 20 percent a year, and they still feel the need to raise tuition."

It wasn't always so. Until recent decades, the typical college treasury was a sleepy place run by a retired college grandee who based his investment decisions on tips from his stockbroker or golfing buddy. Then, in 1973, pioneer investor George Putnam was hired to modernize Harvard's endowment and quickly brought in crack advisers, who moved into hedge funds, foreign currencies and the array of investments that has since made Harvard the endowment-race leader, with a war chest of $25.4 billion.

So with such impressive returns, why do tuition rates keep going up, often beyond the rate of inflation? Universities say they are paying bills today for last year's programs and facilities, in an endless game of catch-up. As endowments grow, though, so does frustration among alumni over endless requests for fresh donations and new study programs, sports facilities and lecture halls. "We are entering a point where our top institutions are at risk of being populated either with the superwealthy or the extremely talented," says Cook. "In other words, those who can afford to pay and those who can get in on a full scholarship."

On the other hand, schools like Berea College in Kentucky and Massachusetts's Franklin W. Olin College of Engineering are using flush donor funds to reduce tuition fees--a fine idea, investors say, absent the kind of stock-market dive that even college donor funds cannot ride out completely. Worries about such a calamity are growing, say academics, as many universities use endowment returns to finance a growing share of their budgets.

The risk is particularly high for state schools plagued by shrinking public funds. Writing in The Chronicle of Higher Education, Mark Schneider, a professor and member of the strategic-planning committee at Iowa's Grinnell College, recently spelled out what might happen to newly free schools if the market fell and the number of incoming students rose: "The board demands a sudden return to tuition, with faculty and staff cutbacks that lead to bad press off the campus and a drop in morale on the campus--certainly a scenario to give trustees and administrators pause." Perhaps. But for now the race is on, and most schools are winning.

Paying The Price; Europe's universities must start considering innovative new methods of raising money if they want to stay competitive.

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Blair is the prime minister of Britain.

Academics have a venerable tradition of sharing ideas and knowledge across national boundaries. In today's shrinking world, the universities that employ them must also look outward to survive, compete and grow. And governments must be more imaginative in finding the right funding solutions to support that growth.

Throughout the developed world, a growing proportion of the population is accessing higher education. Across Europe, there are now upwards of 17 million students, 20 percent more than in 1997. In England, 10 percent of secondary-school graduates went to university in 1966; today 42 percent of those under 30 have college degrees--a proportion we expect will rise to half by 2010.

Student numbers are growing as the economy places knowledge at a premium and traditional blue-collar jobs migrate in search of lower wages and production costs. So today's graduate must be ready to work in a world where jobs are rarely for life and where adaptability is as prized as knowledge and creativity.

This presents governments and universities with big challenges. With the demand for college graduates increasing rapidly, the costs of higher education can no longer be borne by taxpayers alone. Universities have to find extra resources through student fees, overseas recruitment, industry partnerships and alumni donations.

The reasons are clear. In the U.K., we are fortunate in having many great universities, including Oxford and Cambridge. But to remain world leaders, they need to continue to provide the highest standards of instruction and research. To remain competitive our universities must attract the right level of public and private investment. The European Commission has calculated that across the EU there is a spending gap with the United States of 150 billion.

European universities, some of which stretch their lineage back to the Renaissance, find these challenges difficult; their governments even more so. Free tertiary education has been regarded as sacrosanct as free primary or secondary schooling throughout much of the Continent.

Yet those who benefit from higher education earn substantially more than their fellow citizens, whose taxes pay their fees--which is why tuition fees are increasingly on the agenda. European governments are starting to recognize that it is no longer feasible to continue providing wholly free higher education from general taxation, and many are considering fees.

In England, we have introduced undergraduate fees of up to 3,000 ($5,000) a year from this September (they were 1,175 until last year, but, before 1998, no fees were paid). Students effectively borrow the cost of tuition along with money for their living expenses, and repay it alongside their income tax after they graduate and start earning. There are grants available for lower-income students.

Fees are not enough on their own. The U.K. government provides substantial research funding to its universities, but research is increasingly supported by industry and business foundations, too. Such links can help make research more useful to economic development. The United States has had a long tradition of giving by alumni; U.K. universities are starting to build similar programs, and have reported a growth in donations.

And as Lambert and Butler's recent report shows, diversity must also be part of the solution. The future success of higher education will depend on more than just world-class research, though that is a crucial element. It will also require good business schools, opportunities for lifelong learning, strong teaching universities and good regional schools.

Each can and should play to its strengths. But to thrive and survive, universities cannot stand still. There will be more mergers and partnerships. Innovation will be an increasingly prized commodity. European governments must give their great universities the same freedom to innovate that their American--and even Chinese--counterparts enjoy through strong independent governance.

As our world gets smaller, our capacity to acquire and apply knowledge must expand. This is not just a challenge for individual countries or universities. It is an imperative for the entire global community.

No Degrees Necessary; China expands its vocational training to narrow the economic divide.

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China is turning to vocational training as a means of prolonging its economic ascendancy and quelling unrest. It's an urgent priority, given that recent college graduates can't find jobs and the lack of educational opportunities in the countryside is stoking rural unrest. Last month the All-China Federation of Trade Unions announced a "small business-credit plan for nationwide workers," which will provide $125 million in loans to help some 250,000 laid-off workers get additional vocational training in order to find new jobs. Similarly, the Shanghai Committee of the Communist Party of China endorsed a development blueprint to create a "new socialist countryside," including higher subsidies to farmers for training in modern agricultural methods.

The appeal of vocational schools is growing partly in response to the growing realization that a Chinese university degree can be a ticket to nowhere. When China's schools reopened after the Cultural Revolution, there weren't enough universities to accommodate a generation of disenfranchised scholars. Now the opposite is true. In the last seven years the number of Chinese college graduates has quintupled, reaching 4.1 million this year. But the National Development and Reform Commission reports that at least 60 percent of these graduates can't find work.

In contrast, vocational schools are popular because students learn real skills, from plumbing to nursing, that can be applied outside the classroom. When Li Xiangdong graduated from high school last year, he defied his parents' wish that he find a job, and enrolled in a vocational school near his home in southwestern Beijing offering classes in Leisure Sports Service and Management in anticipation of the 2008 Beijing Summer Olympics. "Now I know I will have the training to find a better job when I graduate," he says. "I will be able to assist my family and improve my future."

And while urban universities draw the best and the brightest from the countryside--worsening a vast urban-rural divide--most of China's more than 17,000 vocational schools are located in small villages. "Vocational training can help improve the standard of living of an entire community," says Peng Peigen, an architecture professor at Qinghua University. Peng's China First Joint Venture Architecture Firm endowed a vocational school in China's southern Yunnan province last year to train what he calls "barefoot architects" to take energy-efficient building methods to farm regions. And to make a better living for themselves.

The Right To Learn; Students around the world are demanding access to higher education. But it's not always easy to provide.

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Gregorian is the president of Carnegie Corporation of New York and president emeritus of Brown University.

In America, higher education has long been considered not a privilege but a right. The 1862 passage of the Land-Grant Colleges Act brought education to the people by establishing universities in every state, geared toward providing not only liberal-arts education but training in pedagogy, agriculture, engineering, the law, medicine and other professions. After World War II, the GI Bill further democratized access to higher education, turning it into a basic right worthy of public funding. Since 1972, millions of low-income college students have paid for their educations with more than $150 billion in federal Pell Grants.

Now that same concept of education as a right is spreading throughout the world. Even the citizens of states still in transition from their colonial legacies or emerging from war and civil strife demand that their homelands provide university-level education. Individuals increasingly recognize that their lot in life depends on their level of education and training. And states view free or affordable higher education as essential to their modernization and successful participation in the global marketplace. Many countries have tried to meet this growing demand by establishing as many institutions of higher education as possible. But creating a quality university system is easier said than done; though good schools can solve social ills from poverty to unemployment, a thousand practical problems and policy constraints stand in the way of developing them.

Indeed, simply establishing a school is not the same as having the requisite personnel, equipment, material, technological know-how and finances to sustain it. In developing nations, there may be enough political will for equal opportunity in higher education, but not enough resources for excellence. There are other challenges as well: in developing parts of Africa, Asia and Latin America, some of the best universities are under pressure to admit students from across the continent, in part--as in the United States--to increase their prestige and revenue. Often, this provokes debate within the university and the society at large about whether a nation should reserve its limited educational resources for its own population, or welcome students from across the region in the hope of promoting solidarity with neighboring states.

Some have turned to "virtual universities" or distance learning to help solve the problem. Widespread access to the Internet has made this feasible. But it also raises a number of concerns: to what extent, for example, does personal interaction with teachers matter? How much does mixing with other students contribute to an understanding of different ethnic groups, races and ideologies? What about the whole environment created by being part of a learning community over the course of four years?

A first-rate faculty is key to building a successful university. But strapped for cash, time and expertise, many institutions simply import visiting professors or rely on part-time graduate students to teach. Such hires usually remain outsiders among the university community, receive few benefits and are often neither adequately trained nor highly skilled. The opposite extreme--hiring academic "stars" in order to gain prestige but then leaving empty the coffers needed to hire young, high-quality professors--is also a recipe for institutional weakness. Ironically, universities suffer further when governments, along with local and international corporations, raid their best and brightest teachers.

In many globalizing markets, student expectations far outstrip the capabilities of fledgling university systems. China, for instance, has made remarkable efforts to provide ample educational opportunities for its talented young people. Yet everyone wants a top degree; students who attend second-tier universities eagerly pay extra to have their degrees bear the name of a better university--and have been known to riot when denied that opportunity. Some recent Chinese college graduates have refused to move out of their dormitories after failing to find either jobs or affordable housing.

Similar frustrations are evident in other developing countries, where a science degree is no guarantee of a job in that field. Underemploying a country's best-educated citizens is counterproductive, demoralizing and devastating to the yearning for upward mobility. A physicist working in a customs house is a symbol of national stagnation, not advancement. It also makes painfully clear that the right to an education does not automatically translate into the right to a suitably challenging, high-paying job.

Still, the clamor for higher education does not necessarily mean that students expect--or want--to be subject to rigorous coursework or held to high standards. In many countries, the trend is toward "fair" tests that give more students a chance to pass their classes and earn their degrees. To some extent, this is a reaction to the kind of centralized, high-stakes exam practices developed by the former Soviet Union, France and other states to identify talent and "manage" their citizens' aspirations--in effect, designed to ensure that while everyone may get a chance, only a certain percentage will succeed.

Even when universities do everything in their power to provide excellent, high-quality education, the need to respond to the forces of globalization by developing technology or building international ties often leads them to neglect their own nation's social agenda. If a nation is to progress, it needs well-educated teachers, doctors, lawyers, social workers, journalists and business leaders, among others. And these individuals must be not only trained but retained, requiring incentives to keep them at home. Otherwise, we see, for example, an exodus of trained health-care providers from developing nations to Western hospitals. Britain has been a huge beneficiary of nurses emigrating from Malawi. Similarly, the United States has eased its shortage by welcoming nursing graduates from the Philippines. Namibia, meanwhile, cannot provide the financial incentives to keep its nurses; 30 percent of its nursing slots are vacant.

Taking these trends together, one conclusion is clear: throughout the world, the role of the university is critical to national development and central to the progress of society. And as such, it will continue to be the engine of change for every nation; all citizens, from the richest to the poorest, will look within its walls for the keys to their future. And not just their economic future: the main aim of higher education in a globalized setting must be for human beings and societies to develop a deeper understanding of each other's values, traditions and cultures. In essence, while governments are busy creating economic trade agreements, universities must not only provide the requisite expertise but also work to foster cultural exchanges of ideas, wisdom and knowledge--the truly precious currency of humankind.

Teaching Humanity; In our globalized world, an arts education is more crucial than ever as a way to cultivate sympathy for others.

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Nussbaum is the Ernst Freund Distinguished Service Professor of Law and Ethics at the University of Chicago.

We live in a world that is dominated by the profit motive--which suggests to concerned citizens that education in science and technology is crucially important to the future success of their nations. I have no objection to good scientific and technical education, and I don't wish to suggest that nations should stop trying to improve it. But I worry that other abilities, equally crucial, are at risk of getting lost in the competitive flurry. The abilities associated with the humanities and the arts are also vital, both to the health of individual nations and to the creation of a decent world culture. These include the ability to think critically, to transcend local loyalties and to approach international problems as a "citizen of the world." And, perhaps most important, the ability to imagine sympathetically the predicament of another person.

This essential ability can be called the narrative imagination: it leads us to be intelligent readers of other people's stories and to understand their emotions and wishes. The cultivation of sympathy was a central public task of ancient Athenian tragedy, and thus a key element in ancient Greek democracy; it has also informed the best modern ideas of progressive education in both Western and non-Western traditions. (American John Dewey and Rabindranath Tagore in India had very similar ideas about the importance of arts education.) One of the best ways to cultivate sympathy is through instruction in literature, music, theater, fine art and dance.

Each culture--indeed, each student--has blind spots: groups within it or abroad that are especially likely to be treated ignorantly or obtusely. A good arts education will select works specifically to promote criticism of this obtuseness, and a better vision of the unseen. Ralph Ellison, in an introduction to a new edition of his 1952 novel "Invisible Man," wrote that such a novel could be "a raft of perception, hope, and entertainment," on which American culture could "negotiate the snags and whirlpools" between us and our democratic ideals. Through the imagination we can have insight into the experience of another group or person that it is difficult to attain in daily life--particularly when our world has constructed suspicions and divisions that make any encounter difficult.

To cultivate our students' "inner eyes" we need carefully crafted instruction in the arts and humanities, which will bring students into contact with issues of gender, race, ethnicity and cross-cultural experience. The arts also instruct students in both freedom and community. When people put on a play or a dance piece together, they learn to cooperate--and find they must go beyond tradition and authority if they are going to express themselves well. The sort of community created by the arts is nonhierarchical--a model of the responsiveness and interactivity that a good democracy will also foster in its political processes. And, not least, the arts can be a great source of joy. Participating in plays, songs and dances fills children with happiness that can carry over into the rest of their education.

Moreover, this element of joy--of sheer fun--can help the arts to offer a venue for exploring difficult issues without crippling and counterproductive anxiety. As radical artists have often emphasized, the arts, by generating pleasure in connection with acts of cultural criticism, promote an endurable, even attractive, dialogue with the prejudices of the past, rather than an argument fraught with fear and defensiveness.

Education in sympathy is doing quite well in the place where I first studied it: namely, the liberal-arts curricula of U.S. college and universities. (This part of the curricula particularly attracts philanthropic support, since wealthy people remember with pleasure the time when they read books they loved and considered issues with open minds.) Outside the United States, many nations whose universities do not include a liberal-arts curriculum are now striving to build one: they acknowledge its importance in crafting a public response to the fear and suspicion in increasingly pluralized societies. I've been involved in such discussions in the Netherlands, Sweden, Germany, Italy, India and Bangladesh.

But liberal education has high financial and pedagogical costs. Such teaching needs small classes, where students get copious feedback on frequent writing assignments. European professors are not used to this idea--and would now be horrible at it if they did try; they've come to expect that holding a chair means not having to grade undergraduate writing assignments. (This is also true in parts of Asia.) And even where faculty are keen on the liberal-arts model, bureaucrats can be unwilling to support enough teaching positions required to make it work. The University of Oslo, for instance, has introduced a required ethics course for first-year students, but it is taught as a lecture to 500 people, with a multiple-choice examination at the end. This is worse than useless. It gives students the illusion that they have actually had some philosophical education, when they have had only a gesture toward such learning.

At Sweden's new urban university, Sodertorn's Hogskola, where many students are immigrants, the faculty and the vice-chancellor badly want a liberal-arts curriculum based on preparation for democratic citizenship. They have sent young faculty to U. S. liberal-arts colleges to study and practice small-class teaching, and they have constructed an exciting course on democracy. As yet, however, they do not have enough teachers to run the small sections that are crucial if the class is to succeed. Only in small idiosyncratic institutions, such as the Utrecht Institute for Humanist Studies and the European College of Liberal Arts in Berlin, is the liberal-arts idea a reality in Europe.

Democracies have great rational and imaginative powers. Yet they also are prone to irrationality, parochialism, haste, sloppiness and selfishness. Education based mainly on profitability in the global market magnifies these deficiencies--to the point that they threaten the very life of democracy itself. We need to favor an education that cultivates the critical capacities, that fosters a complex understanding of the world and its peoples and that educates and refines the capacity for sympathy. In short, an education that cultivates human beings rather than producing useful machines. If we do not insist on the crucial importance of the humanities and the arts, they will drop away. They don't make money. But they do something far more precious: they make a world worth living in.

Sowing Seeds; From Cornell in Qatar to Monash in Malaysia, satellite campuses are a booming business.

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The campus architecture suggests Arabia, and the surrounding sands stretch to the horizon. But for 350 students, this is a tiny patch of Scotland in the Dubai desert. They'll receive their degrees from Heriot-Watt University in Edinburgh, educated largely by a faculty who speak in British accents. "Our university was created to serve a developing country--Scotland--180 years ago," says Brian Smart, the Scottish professor who heads the local faculty. "We thought, 'Let's take the same model and plug it into other countries around the world'."

These days that's hardly an original thought. With backing from the Dubai government, a cluster of overseas colleges--from India's Mahatma Gandhi University to the St. Petersburg State University of Engineering and Economics--have set up outposts here in the Knowledge Village since it opened in 2002. Nor is Dubai the lone gulf state pursuing a role as an academic hub. Local students looking for a U.S. education can train at Cornell's medical school or Georgetown's school of foreign service, both in Qatar's Education City. Indeed, the trend is global: Britain's Nottingham University has a branch near Shanghai, the Rochester Institute of Technology has one beside the Mediterranean in Croatia, and Australia's Monash University has one in Malaysia.

Forget the days when a coveted foreign degree meant costly travel and a few years away from home. Today it's often the institution--not the student--that moves. Since 2000, the number of branch campuses worldwide has roughly doubled to about 80, as more colleges tap into the growing demand for a prestigious Western education; foreign satellite campuses have become a small but fast-growing segment of the $30 billion international-education industry. America still dominates this market, but other providers--notably the British and the Australians--are pushing in. All are realizing that it makes sense for universities to invest in bricks-and-mortar facilities close to the richest markets, namely in Asia and the Middle East. Says Line Verbik of the Observatory on Borderless Higher Education, a London-based research group that monitors education trends: "What we are seeing is a really big increase both in the number and diversity of players."

And this is a game in which all players can win. Students receive a high-prestige education for maybe half the cost of going to Europe or North America. Rapidly growing economies like India and China get top-rated schools to plug the gaps in their own educational systems. Countries looking to a future without oil or natural gas get a few big-name foreign universities--and the research facilities that accompany them--to help build a knowledge-based economy that won't depend on finite natural resources. Small wonder, then, that aspiring nations now vie to attract the right foreign schools. Inducements can be lavish. Qatar, for example, pays not only for the shiny new buildings but also for staff bonuses. Governments know that the best colleges bring the best recruits, including those from neighboring states, whose tuition contributes to the economy. By 2012, for example, Singapore hopes to pull in 150,000 outside students--three times the 2002 total. The bait: a list of branch campuses from world-renowned schools ranging from the French-based business school Insead to the Technical University of Munich and MIT.

For their part, the incoming institutions get the chance to internationalize their reputations and build a global brand. "Sitting here in the United States, we see the world changing and evolving, with economic development moving to the Pacific, and we would like to be part of that world," says Mark Kamlet, provost of Carnegie Mellon University in Pennsylvania, which has a second base in Qatar. A stint overseas gives the teaching staff a broader international perspective as well as the chance to scout for possible postgraduate talent, while home students welcome the possibility of study overseas at a familiar institution.

A well-run college can also make a handy ambassador in corners of the world where the West is suspect. "This is a good way for the United States to represent itself overseas, particularly in Arab countries where in the past most of the trade has been in guns and oil," says Antonio Gotto, dean of Weill Cornell Medical College, which opened its Qatar campus in 2003. The school now attracts students--70 percent women--from across the Middle East including Syria, the Palestinian territories, Iraq and Iran.

To be sure, managing cross-cultural relations can be tricky. When money is involved, host nations want returns. Only last month, Singapore announced it was cutting off funds to a biomedical-research facility from Baltimore-based Johns Hopkins University, claiming that it had failed to meet performance targets. "We cannot justify the continuation of public funding for a collaboration that has failed to yield results for Singapore," said Andre Wan of the government's science-and-technology research agency. College bean counters with long memories will also remember an overenthusiastic expansion into Japan in the '80s--followed by a spate of campus closures due to culture clashes and disappointing enrollment figures.

Certainly, there may be easier ways for universities to earn cash. Many Western institutions now offer their degrees through franchise arrangements with local partners, and the spread of the Internet has broadened the opportunity for distance learning. But standards can easily slip without the regular controls that go with an on-the-ground presence. And establishing a permanent campus abroad demonstrates faith in the host country's future. "A branch campus is about commitment--not just renting out your name," says Stphan Vincent-Lancrin, an expert on higher education at the Organization for Economic Cooperation and Development in Paris.

There are some powerful financial imperatives at work these days. Tight-fisted governments are pushing the state-funded universities of Britain and Australia, for instance, to raise more cash for themselves. The inflow of foreign students--once a dependable source of extra revenue--can no longer be guaranteed, thanks to rising competition among countries for high-paying nonresidents. Enterprising colleges in Germany and the Netherlands have even introduced more coveted English-language instruction to lure foreigners. The number of Chinese students taking up places at British universities fell 21 percent last year, due in part to growing opportunities closer to home.

Given such obstacles, exporting education can seem more practical than importing students. "We are grateful for foreign students who come here, but we are competing with top international universities, and that competition is going to get tougher and tougher," says Douglas Tallack, a professor at Britain's Nottingham University. His university's solution: an outpost in Malaysia and a partnership with a Chinese corporation that has created a 38-hectare campus close to Shanghai--complete with a near-replica of Nottingham's neoclassical central building. Student numbers are rising fast and should reach 4,000 within five years. When it comes to education, location isn't everything; provenance is.

Wanted: Foreigners; Universities are competing to attract the best, brightest and richest students.

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With Akiko Kashiwagi in Tokyo

Students who want to obtain their degrees abroad have never had more options. For decades, the best, brightest and richest typically chose between Oxbridge and America's top universities. No longer. Recognizing the windfall that foreign students bring, countries including New Zealand, South Africa, the Netherlands and Japan have begun stepping up efforts to attract them.

They're fighting over a big pie. Of the estimated $30 billion international-education market, the United States earns about $13 billion. In Britain, Chancellor of the Exchequer Gordon Brown has said that education is the country's fastest-growing source of export income. UNESCO estimates that more than 2.5 million students study overseas each year, and that number is "definitely growing," says Peggy Blumenthal, executive vice president of the Institute of International Education. By 2025, 7.5 million students are expected to seek education outside their home countries.

With tighter visa restrictions and high fees creating obstacles for foreign students in America and Britain, other countries are reaching out. The Netherlands now teaches more than 50 percent of its master's programs in English, and has boosted recruitment efforts abroad. "With the government funding educational-information centers and a strong presence at international student fairs, this is a push," says Bernd Wachter, director of the Academic Cooperation Association in Brussels.

In New Zealand, the number of international students jumped from about 4,000 in 1999 to more than 21,000 in 2004, with the country earning an estimated $1.2 billion off them. Last year the government announced it would spend an extra $3 million to promote the industry.

Even Japan is reaching out to nonnative students. In 2004, Tokyo's Waseda University launched the School of International Liberal Studies, where a quarter of the students are foreign and all classes are taught in English--except Japanese studies. Recruiters have targeted reputable high schools from South Korea to Singapore. Already three times more foreign students have applied than could matriculate. "This is one way for Japan's higher education to become globally competitive," says Dean Katsuichi Uchida.

America and Britain are fighting to hang on to their share of the market. "Continental Europe used to see marketing education as dirty, but schools are starting to say, 'We have to be more proactive to compete'," says Wachter. If they don't go after foreign students, someone else will.

World of Knowledge; From their student bodies to their research practices, universities are becoming more global.

Levin is the president of Yale University.

As never before in their long history, universities have become instruments of national competition as well as instruments of peace. They are the locus of the scientific discoveries that move economies forward, and the primary means of educating the talent required to obtain and maintain competitive advantage. But at the same time, the opening of national borders to the flow of goods, services, information and especially people has made universities a powerful force for global integration, mutual understanding and geopolitical stability.

In response to the same forces that have propelled the world economy, universities have become more self-consciously global: seeking students from around the world who represent the entire spectrum of cultures and values, sending their own students abroad to prepare them for global careers, offering courses of study that address the challenges of an interconnected world and collaborative research programs to advance science for the benefit of all humanity.

Of the forces shaping higher education none is more sweeping than the movement across borders. Over the past three decades the number of students leaving home each year to study abroad has grown at an annual rate of 3.9 percent, from 800,000 in 1975 to 2.5 million in 2004. Most travel from one developed nation to another, but the flow from developing to developed countries is growing rapidly. The reverse flow, from developed to developing countries, is on the rise, too. Today foreign students earn 30 percent of the doctoral degrees awarded in the United States and 38 percent of those in the United Kingdom. And the number crossing borders for undergraduate study is growing as well, to 8 percent of the undergraduates at America's Ivy League institutions and 10 percent of all undergraduates in the U.K. In the United States, 20 percent of newly hired professors in science and engineering are foreign-born, and in China the vast majority of newly hired faculty at the top research universities received their graduate education abroad.

What are the consequences of these shifts among the highly educated? Consider this: on the night after the attacks on the World Trade Center, Jewish students at Yale (most of them American) came together with Muslim students (most of them foreign) to organize a vigil. Or this: every year the student-run Forum for American/Chinese Exchange at Stanford (FACES) organizes conferences in both China and at Stanford, bringing together students from both countries chosen to discuss Sino-U.S. relations with leading experts. The leaders of student groups promoting international collaboration are in touch with each other daily via e-mail and Skype, technologies that not only facilitate cooperative projects but also increase the likelihood of creating lifelong personal ties. The bottom line: the flow of students across national borders--students who are disproportionately likely to become leaders in their home countries--enables deeper mutual understanding, tolerance and global integration.

As part of this, universities are encouraging students to spend some of their undergraduate experience in another country. In Europe, more than 140,000 students participate in the Erasmus program each year, taking courses for credit in one of 2,200 participating institutions across the continent. And in the United States, institutions are mobilizing their alumni to help place students in summer internships abroad to prepare them for global careers. Yale and Harvard have led the way, offering every undergraduate at least one international study or internship opportunity--and providing the financial resources to make it possible. Universities are also establishing more-ambitious foreign outposts to serve students primarily from the local market rather than the parent campus. And true educational joint ventures are gaining favor, such as the 20-year-old Johns Hopkins-Nanjing program in Chinese and American Studies, the Duke Goethe executive M.B.A. program and the MIT-Singapore alliance, which offers dual graduate degrees in a variety of engineering fields.

Globalization is also reshaping the way research is done. One new trend involves sourcing portions of a research program to another country. Yale professor and Howard Hughes Medical Institute investigator Tian Xu directs a research center focused on the genetics of human disease at his alma mater, Shanghai's Fudan University, in collaboration with faculty colleagues from both schools. The Shanghai center has 95 employees and graduate students working in a 4,300-square-meter laboratory facility. Yale faculty, postdocs and graduate students visit regularly and attend videoconference seminars with scientists from both campuses. The arrangement benefits both countries; Xu's Yale lab is more productive, thanks to the lower costs of conducting research in China, and Chinese graduate students, postdocs and faculty get on-the-job training from a world-class scientist and his U.S. team.

Yale has a similar facility at Peking University in Beijing, where Prof. Xing-Wang Deng directs a program studying the biology of plant systems, aimed at improving crops. Like Xu, Deng is a graduate of the institution where he performs his research. But it is only a matter of time before China starts to set up similar facilities for outstanding foreign scientists who have no prior connection to the country.

Given NEWSWEEK's rankings, it's not surprising that nations seeking advancement are looking closely at America's research universities as a model. Since the beginning of the Industrial Revolution, technological change has been the principal source of economic growth and a rising standard of living. But in the past half century, technological progress has become dependent on scientific advances and their translation to practice--a process that requires both public and private investment. After the second world war, the United States recognized that maintaining its leadership in defense technology required substantial public investment in university-based science. By the mid-1950s the United States had designated public support for university research for the basic sciences as well as for health, agriculture, defense and energy.

As a result of its strength in science, the United States has consistently led the world in the commercialization of major new technologies, from the mainframe computer and the integrated circuit of the 1960s to the Internet infrastructure and applications software of the 1990s. The link between university-based science and industrial application is often indirect but sometimes highly visible: Silicon Valley was intentionally created by Stanford University, and Route 128 outside Boston has long housed companies spun off from MIT and Harvard. Around the world, governments have encouraged replication of this model, perhaps most successfully in Cambridge, England, where Microsoft and scores of other leading software and biotechnology companies have set up shop around the university. An impressive array of technology companies already surrounds some of the major campuses in China--notably Peking and Tsinghua universities in Beijing, and Fudan and Shanghai Jiatong universities in Shanghai.

Universities are also adapting more American research practices. Until recently, for instance, Japan allocated research funding in block grants, which wound up in the hands of the country's most senior--but not necessarily most productive--professors. But between 2000 and 2004, the country increased the volume of grants subject to competitive review by 57 percent, in an effort to direct funding to the more meritorious.

Even more-dramatic changes are taking place in China, where a number of leading universities, intent on attaining world-class status, have been carefully studying America's top institutions for new ideas. These include widening the search for new faculty well beyond their own graduates, establishing rigorous standards for awarding lifetime tenure and consulting with independent experts on personnel decisions. Several leading universities have ditched the traditional specialized undergraduate curriculum for a year or two of general education followed by free choice of a major field of study, as is common in the United States. Some are experimenting with using criteria other than national exams to admit students. And many elite universities are determined to abandon recitation in favor of classroom interaction that encourages students to think independently--a hopeful sign for those eager to see a fully democratic China.

Indeed, China is intent on playing all its cards. By investing heavily in research, tripling university enrollments between 1998 and 2004, and encouraging top students to think independently, the country is self-consciously using its universities as a means to stimulate economic growth. At the same time, since Deng Xiaoping first permitted Chinese students to seek education in the West in 1978, no country has made a more deliberate effort to send its most talented students abroad for a top education--especially at the graduate level. Today, in contrast to 10 or 20 years ago when economic opportunity was limited at home, most Chinese students return after graduation--often with an appreciation of the values of a free society and a greater understanding of the countries where they studied.

Europe, by contrast, has lost its competitive edge. According to "The Future of European Universities: Renaissance or Decay?" a devastating recent critique by Confederation of British Industry Director General Richard Lambert and Nick Butler, Chief of Strategic Planning at British Petroleum, European governments have systematically weakened their top universities, once the pride of the world. They have invested too little in research, spread limited resources across too many institutions, expanded enrollments without increasing faculty and refused to allow universities sufficient autonomy, the report says. To flourish, they need to concentrate more resources in the hands of the strongest universities and allow them to generate revenue by charging tuition fees like their U.S. counterparts--and awarding financial aid to those in greatest need.

For all its success, the United States remains deeply ambivalent about sustaining the research-university model. Most politicians recognize the link between investment in science and national economic strength, but support for research funding has been fitful and sporadic rather than steady. The budget of the National Institutes of Health doubled between 1998 and 2003, but has risen more slowly than inflation since then. Support for the physical sciences and engineering barely kept pace with inflation during that same period; legislation to double these expenditures in 10 years is currently pending. The attempt to make up lost ground is welcome, but the nation would be better served by steady, predictable increases in science funding at the rate of long-term GDP growth, which is on the order of inflation plus 3 percent per year.

American politicians have great difficulty recognizing that admitting more foreign students can greatly promote the national interest by increasing international understanding. Adjusted for inflation, public funding for international exchanges and foreign-language study is well below the levels of 40 years ago. In the wake of September 11, changes in the visa process caused a dramatic decline in the number of foreign students seeking admission to U.S. universities, and a corresponding surge in enrollments in Australia, Singapore and the U.K. Objections from American university and business leaders led to improvements in the process and a reversal of the decline, but the United States is still seen by many as unwelcoming to international students. An abortive attempt last year by the Commerce Department to extend the scope of export control regulations in university research labs reinforced this unfortunate signal.

Most Americans recognize that universities contribute to the nation's well-being through their scientific research, but many fear that foreign students threaten American competitiveness by taking their knowledge and skills back home. They fail to grasp that welcoming foreign students to the United States has two overriding positive effects: first, the very best of them stay in the States and--like immigrants throughout history--strengthen the nation; and second, foreign students who study in the United States become ambassadors for many of its most cherished values when they return home. Or at least they understand them better. In America as elsewhere, few instruments of foreign policy are as effective in promoting peace and stability as welcoming international university students.