This chapter provides an American perspective on issues affecting higher
education in China.One of the major differences between the economy of today and
the industrial economy of a generation ago is that a contemporary economy
has to be based much more on the authority of ideas and much less on the
idea of authority.In
the United States, the land-grant colleges established during the Lincoln
administration--with the objective of spreading education and in particular
promoting research into more productive agriculture and the dissemination of
agricultural technologies--are generally regarded as having made an important
contribution to US economic success.As the agricultural revolution gave way to the Industrial Revolution,
increasingly the Industrial Revolution is giving way to a kind of information
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Financing Higher Education and Economic Development in East Asia
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revolution.Salary differentials between those with high-school degrees and no high-school
degree, those with college degrees and no college degree, graduate degrees
and college degrees, those with training at first-rate institutions versus those
with training at second-rate institutions--all of these economic differentials
have widened very substantially, and that suggests the high importance of the
increase in the supply of highly skilled workers.Strong institutions of higher education that
promote access, that enable access without regard to financial circumstances or
the ability to pay, that provide large numbers of spaces for those who are most
able, regardless of their connections or their family's wealth, are also important
guarantors of the kind of social mobility that promotes a healthy society.In emerging
markets, the largest fraction of the benefit will probably derive from facilitating
the adoption and dissemination of new technologies.He expressed that hope because he recognised that people
who started successful businesses, who built successful institutions, generated
enormous externalities by employing large numbers of people.The case in countries such as the United States or those in Europe is that a large
fraction of the benefits of higher education derive from enabling entrepreneurs
to push the frontier of science with commercial application.None of the arguments is entirely without merit, and to
suggest that higher education should be emphasised at the expense of primary
and secondary education is not the point.Economic historians who have studied the growth of
Europe assign a very significant role to what took place in universities.We are replacing semi-conductive steel with
semiconductors; we are replacing manufactured products with services.In either event, successful
practically oriented institutions of education are crucial to the success of any
country competing in today's global economy.The argument was made from the point
of view of mass economic development.