INNOVATIVE STRATEGIES IN Innovative Strategies in Higher Education for Accelerated Human Resource Development in South Asia This publication highlights priorities and strategies in meeting current and emerging needs Higher Education for skills development in South Asia. The report is in line with the Asian Development Bank’s effort to support its developing member countries’ priorities toward global competitiveness, increased productivity, and inclusive growth. It also identifies key issues, constraints and areas for Accelerated Human Resource of improvement in making skills training more responsive to emerging labor market needs in South Asia as an important factor in sustaining high economic growth. The report was Development in South Asia completed in 2012 under the Australian AID-supported Phase 1 of Subproject 11 (Innovative Strategies for Accelerated Human Resource Development) of RETA 6337 (Development Partnership Program for South Asia). About the Asian Development Bank ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains home to approximately two-thirds of the world’s poor: 1.6 billion people who live on less than $2 a day, with 733 million struggling on less than $1.25 a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration. Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines www.adb.org INNOVATIVE STRATEGIES IN Higher Education for Accelerated Human Resource Development in South Asia January 2014 © 2014 Asian Development Bank All rights reserved. Published in 2014. Printed in the Philippines. ISBN 978-92-9254-421-8 (Print), 978-92-9254-422-5 (PDF) Publication Stock No. RPT136076 Cataloging-in-Publication Data Asian Development Bank. Innovative strategies in higher education for accelerated human resource development in South Asia. Mandaluyong City, Philippines: Asian Development Bank, 2014. 1. Higher education. 2. Human resource development. 3. South Asia. I. Asian Development Bank. The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area. ADB encourages printing or copying information exclusively for personal and noncommercial use with proper acknowledgment of ADB. Users are restricted from reselling, redistributing, or creating derivative works for commercial purposes without the express, written consent of ADB. Note: In this publication, “$” refers to US dollars. 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines Tel +63 2 632 4444 Fax +63 2 636 2444 www.adb.org For orders, please contact: Public Information Center Fax +63 2 636 2584 [email protected] Printed on recycled paper Table of Contents Tables, Figures, and Boxes v Foreword vii Preface viii Abbreviations x Currency Equivalents x Executive Summary xii 1. ECONOMIC GROWTH, THE KNOWLEDGE SOCIETY, AND HIGHER EDUcatION 1 2. COMpetITIVENess, INNOVATION, AND HUMAN ResOURCE DEVELOPMENT IN SOUTH ASIa 7 Competitiveness 7 The Knowledge Economy 8 Human Development 8 Corruption Undermines Competitiveness 9 Summary 10 3. HIGHER EDUcatION IN SOUTH ASIA AND BEYOND 11 Overview 11 Financial Effort 12 University Rankings 13 Country Higher Education Snapshots 14 4. GOING TO UNIVERSITY: WHO Gets IN AND WHO DOes NOT 18 Access 18 Equity 23 Concluding Considerations 28 5. QUALITY IN HIGHER EDUcatION: EVERYONE WANTS It— HOW DO YOU GET It? 29 What Is Quality in Higher Education? 29 Quality Assurance 38 Concluding Considerations 41 iii 6. RELEVANT HIGHER EDUcatION: THE 21ST CENTURY GOAL 42 The Employability Test 43 The ppliedA Research Test 49 Concluding Considerations 54 7. SteeRING HIGHER EDUcatION SYsteMS AND INSTITUTIONS: GOVERNANCE AND MANAGEMENT 56 Context 56 Autonomy and Accountability 57 Legal Frameworks for Higher Education 60 Institutional and System-Wide Governance 61 Leadership and Management 66 Concluding Considerations 69 8. COLLABORATION AND COMpetITION, PARTNERSHIPS AND LINks 70 University–University Partnerships 71 Public–Private Partnerships 73 How to Promote Public–Private Partnerships Involving Universities 76 9. PAYING FOR HIGHER EDUcatION: ReVENUes, EXpeNDITURES, AND TRENDs 78 Why Higher Education Financing Is Important 78 Uncertain Times 78 A Closer Look at Underlying Forces 79 The Budgeting Process 82 Higher Education Revenues 83 Expenditures 88 Simulations of Growth, Revenue, and Expenditure 92 Financing Reform as a Continuous Process 95 Concluding Considerations 96 10 MOVING FORWARD 98 Actions for All Three Countries 100 REFERENCES 102 AppeNDIXes 1 Composition of Higher Education Enrollments in Bangladesh, Nepal, and Sri Lanka 109 2 University Locations in Bangladesh, Nepal, and Sri Lanka 110 3 Statistical Tables—Bangladesh 113 4 Statistical Tables—Nepal 117 5 S 121 tatistical Tables—Sri Lanka Contents iv Tables, Figures, and Boxes Tables 1 Country Context: Bangladesh, Nepal, Sri Lanka 9 2 Inequality-Adjusted Human Development Index 9 3 Competitiveness Rankings for South Asian Countries 10 4 Dimensions of Higher Education Development in Focus and Comparator Countries 11 5 Financial Indicators for Higher Education in Focus and Comparator Countries 12 6 Higher Education Access in Asia, 2008 19 7 Institutional Differentiation in Higher Education: Bangladesh, Nepal, and Sri Lanka 22 8 Research Capacity Indicators for Asia, 2010 or Closest Year 52 9 World Economic Forum Indicator Rankings of Innovation Capacity 54 10 University Autonomy in Bangladesh, Nepal, and Sri Lanka 59 11 University Accountability in Bangladesh, Nepal, and Sri Lanka 60 12 University Governing Boards in South Asia 62 13 South Asia University Governance Classified by Levels of Accountability and Autonomy 62 14 Country Rankings on Indicators of Innovation Potential 74 15 Higher Education Enrollment Growth, 2001–2009 80 16 Public and Private University Tuition Fees in Bangladesh, Nepal, and Sri Lanka 88 17 Average Academic Salaries for Selected Countries, 2008 90 18 Recurrent Expenditure for Higher Education in Bangladesh, Nepal, and Sri Lanka 92 A3.1 Bangladesh: Calculations of Gross Domestic Product, Education Budget Share, and Higher Education Budget Shares, 2010–2020 113 A3.2 Bangladesh: Higher Education Enrollment Projections, 2010–2020 114 A3.3 Bangladesh: Base-Case Scenario 115 A3.4 Bangladesh: Scenario 1 115 A3.5 Bangladesh: Scenario 2 116 A3.6 Bangladesh: Scenario 3 116 A4.1 Nepal: Calculations of Gross Domestic Product, Education Budget Share, and Higher Education Budget Shares, 2010–2020 117 A4.2 Nepal: Higher Education Enrollment Projections, 2010–2020 118 A4.3 Nepal: Base-Case Scenario 119 A4.4 Nepal: Scenario 1 119 A4.5 Nepal: Scenario 2 120 A4.6 Nepal: Scenario 3 120 A5.1 Sri Lanka: Calculations of Gross Domestic Product, Education Budget Share, and Higher Education Budget Shares, 2010–2020 121 A5.2 Sri Lanka: Higher Education Enrollment Projections, 2010–2020 121 A5.3 Sri Lanka: Base-Case Scenario 122 A5.4 Sri Lanka: Scenario 1 122 A5.5 Sri Lanka: Scenario 2 123 A5.6 Sri Lanka: Scenario 3 123 v Figures A2.1 University Numbers and Locations in Bangladesh 110 A2.2 University Numbers and Locations in Nepal 111 A2.3 University Numbers and Locations in Sri Lanka 112 Boxes 1 Australia’s National Innovation Strategy 4 2 Institutional Diversification Strategies in Singapore 22 3 A Recipe for Homegrown Staff Development 31 4 Staff Development Centre of the University of Colombo 33 5 Guidelines and Practical Arrangements for a Quality Assurance System 40 6 Creating Flagship Research Universities in East Asia 50 7 Lessons Learned Concerning University–University Partnerships 72 Tables, Figures, and Boxes Figures, Tables, vi Foreword killed human resources are one of the major binding constraints to sustain high economic growth in South Asia. It is therefore not surprising that the findings from the study show that South Asian countries need to Sinvest significantly in human capital to reap the benefits arising from the limited window of demographic dividend available in the next 3–4 decades and to move up the value chain. The findings are a reminder that the countries’ competitiveness and ability to move up the value chain in the longer term will come from innovation, knowledge, and skills, and not from cheap labor or natural resources, which tend to be short-lived. From the current low skills equilibrium linked to low global competitiveness index and human development index, the South Asian countries have a historical opportunity to leapfrog through strategic investment in human capital anchored on information and communication technology. Asia 2050, published in 2011 by the Asian Development Bank, presents two scenarios: (i) the