How can countries and institutions cope with the increasingly global competition in higher education? Will market and quasi-market forces become prevalent? Who will pay and who will provide higher education?
Higher education is still a predominantly public enterprise in the OECD area, both in terms of provision and financing – with the notable exceptions of Japan and Korea. The budgets of higher education institutions in OECD countries have increased over the past decade, in most cases per student, and with increases in the public funding per student. While public funding is dominant also in academic research, superior research performance relative to the economic capacity often correlates with relatively high public investment in higher education.
However, a noteworthy trend is an increased involvement of private actors in higher education in the OECD area, especially with a faster growth of household than governmental financing for institutions. The growth of private higher education – both in terms of provision and financing – is more marked on a global scale, especially in Latin America and East Asia. This growth is likely to continue in the future, especially in developing countries where rapid demographic growth and high private rates of return will continue to boost the demand for higher education. Ensuring quality and sufficient diversity are essential future challenges for private provision.
Against the demand for better public management, there is a noteworthy trend towards more performance-based and competitive allocation of higher education financing in many countries. Growth of demand-side financing implying greater user choice could be envisaged in the future, especially in countries where higher education systems already combine a mixture of public and private elements. At the same time, the quest for accountability, together with diversification of higher education provision, has strengthened the emphasis put on of higher education quality assurance. While there is a general trend from inputs towards assessing learning and labour market outcomes, a major question concerns the potential emergence of international quality assurance standards in the future.
Related project documentation
Related OECD work on Education