Emerging Economies Are Exporting Education

With increasing economic growth, and the subsequent expansion of the middle class in regions like Latin America, there is a new market being created for quality post-secondary education.
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Universities in the United States have long been - and in many ways still are - the most attractive higher education option for students around the world. As recent research from the Brookings Institution demonstrates, the U.S. is a "global hub of higher education."

That is because the U.S. is capable of attracting a full 21 percent of all students studying abroad. According to Brookings, "an estimated 684,807 international students attended tertiary-level education programs in the United States in 2010, versus about 389,958 international students in the United Kingdom, the next-largest destination."

But this overwhelming preference for the U.S. may be eroding, as foreign students are increasingly finding other options for their study abroad experiences. This is happening for a number of reasons: firstly, because the educational institutions in emerging economies are getting better.

With increasing economic growth, and the subsequent expansion of the middle class in regions like Latin America, there is a new market being created for quality post-secondary education. With the rise in local demands for educational services, new providers in both the nonprofit and for profit sectors are getting involved. Indeed, over the past decade, Latin America has seen billions invested in its higher education sector.

"The level of university quality in Latin America has improved significantly," says Sergio Abramowitz, the Vice President of International Business at DeVry, a higher education company with 80,000 students and more than 90 North American campuses. "In fact, new career programs in areas like engineering and technology have grown, offering previously nonexistent alternatives."

And across a number of Latin American countries, universities are expanding their exchange programs. The chance to study abroad, if only for one or two semesters - as is the norm in U.S. universities - provides local students with the opportunity for short-term immersion in another culture and access to other modes of learning.

Another reason relates to post-college job opportunities. As the world's richest and most innovative economy, the U.S. has many of them, while for many years graduates in less developed countries have found themselves struggling for any sort of meaningful, formal employment.

But that has been changing. Talented people have increasingly been able to find better professional opportunities in their native countries. A recent study by LinkedIn, published in May, has measured the net international movement of talent among its members, with a focus on the 20 countries that saw the highest levels of migration.

The results demonstrate the shifting global climate. Leading talent attractors include such emerging economies as Brazil, India, Nigeria, Mexico and South Africa, all of which gained more professionals than they lost. At the same time, the world's developed countries are among the biggest net exporters: the United States, the UK, France, and Italy all lost talent to elsewhere.

As Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates, argued in a recent column at Project Syndicate that "talent flows naturally to countries that create an environment for economic growth; that make life easy for enterprise; that attract and welcome investment; and that nurture a culture of achievement. Skills are attracted to challenge and possibility."

So why are developed countries losing out? Al Maktoum goes on to explain that "opportunity on this scale is becoming a scarce commodity in many parts of the West. But this is not the case in the developing world - at least among countries with the appetite and determination to deploy strong governance and continually raise their competitiveness." In places like the United States, this reality is exacerbated by complex and unwieldy immigration systems.

Finally, a major reason that foreign students may choose to forgo the U.S. relates to finances. The cost of attending American universities has skyrocketed in recent years - by some estimates, having risen by 500 percent since 1985. This reality makes it increasingly difficult for foreign students to afford a U.S. education, as well as increasing dropout rates and burdening a new generation with massive debt as soon as they hit a weakened labor market.

Deepening all of these trends will be the rise of education technologies. Online learning platforms have leapt borders and made education a tradable good. Universities anywhere in the world can now "export" their coursework, lessening the incentives for students to relocate by providing them instant access to leading professors.

MOOCs, for instance - or Massive Open Online Courses - are free, easily accessible online educational platforms that have seen rapid global expansion. MOOCs, offered by leading universities in the U.S., such as Harvard, or by independent companies, such as Coursera, are teaching millions of students in hundreds of countries. Harvard's MOOC has registered over 1 million students in 193 countries; Coursera has 2.4 million students enrolled in 33 online university programs - eight of which are based outside of the U.S.

While immigration is a sensitive - and controversial - topic in the U.S., there is a need to have a conversation about the flagging interest of the most talented foreign students in studying there. And at the same time that the U.S. is pushing people away with its convoluted system, universities in Latin America and elsewhere are becoming ever strong competition for that top talent - potentially reshaping global economic competitiveness for years to come.

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