Get behind the wheel of the global economy

Helping tertiary education in developing countries can benefit everyone, say Jamil Salmi and Jozef Ritzen

In a global economy that becomes faster and more powerful every year, education can transform the development prospects of countries around the world, reducing poverty and boosting economic growth.

Tertiary education stands out as the key to that global economy, which increasingly relies on the use of ideas and technology in devising smarter ways of working and doing business. More than ever, tertiary education drives a country's future. It can mean the difference between a dynamic economy and a marginalised one.

The World Bank advises governments throughout the developing world to give tertiary education a considered place within a "holistic" education agenda, even where they may be struggling to provide primary or secondary schooling. To focus exclusively on basic education would in effect doom a country's efforts to secure an eventually prosperous toehold in a global economy.

The bank's latest report, Constructing Knowledge Societies: New Challenges for Tertiary Education , urges policy-makers to grasp the opportunities that tertiary education, in combination with knowledge networks and new technologies, offers for raising productivity and contributing to growth.

To realise these benefits, policy-makers will need to circumnavigate a mix of old and new obstacles that crowd the path to better tertiary education. For example, most developing and transition countries continue to wrestle with the fundamental question of how to expand coverage and improve the quality and relevance of education in financially sustainable ways.

The report urges governments to help tertiary institutions to be more innovative and respond to the needs of a globally competitive knowledge economy. Options can range from consultancy work with national and international companies to more substantial partnerships and cooperation with established, well-endowed universities, and to appealing for more donor finance earmarked specifically to jump-start or burnish a country's tertiary prowess.

Three factors justify continued public support for systems of higher learning. First, investing in tertiary education generates benefits to society - including long-term returns from basic research, technology applications and greater social cohesion - that are crucial for economic development. Second, qualified secondary graduates who may be discriminated against because they are women, or poor or from the "wrong" ethnic background, often require enlightened government intervention to smooth their way into higher learning. Third, tertiary education plays a key role in supporting the expansion of basic and secondary education. Universities and colleges are needed to train the teachers who will help countries deliver on their 2015 millennium development goal of giving the 115 million children who have never set foot inside a classroom the opportunity of a primary school education.

Many governments have encouraged the formation of private institutions to ease pressures on the public purse and satisfy pent-up demands for access. These have broadened choice for students while prompting public universities to modernise.

As a result, public institutions are striving for greater responsiveness to the changing training needs of employers and the evolving educational demands of students, all of which contribute to a more productive labour force. Public funding is increasingly supplemented by non-public sources. The World Bank offers wide-ranging support to countries committed to developing tertiary education into an important building block for a dynamic, knowledge-driven economy. This week, the bank announced a $250 million (£158 million) loan to India to modernise its engineering colleges, technical universities and polytechnics.

To ensure the effective use of financing, bank operations are increasingly grounded in analysis, stakeholder consultations and lessons learnt from similar endeavours elsewhere.

Globalisation and the growth of "borderless" education raise issues that affect tertiary education in all countries. Yet some of these are beyond the control of any one national government. The World Bank will work to enable the provision of "global public goods" such as an international accreditation framework, legislation for international tertiary education providers, intellectual property regulations governing distance education programmes and unconstrained access to information and communications technologies.

Jamil Salmi is author of Constructing Knowledge Societies . Jozef Ritzen is vice-president of the World Bank's Human Development Network and, from 2003, president of the University of Maastricht.