There Is Sunshine Above the Clouds (Part 4)

Part 4: New Challenges for Universities.

In the past thirty years, competition, information technology, and the porousness of barriers to trade and investment around the globe, have significantly changed the transaction costs and spheres of influence by and on individual companies. However, not only the conditions for individual companies have been changed. Universities have also been exposed to profound changes in their constituency, participation in society, and resource requirements.

At first glance, today’s universities differ little from their predecessors. There are still students and professors, reading books and manuscripts, in classrooms designed for frontal communications. Yet, in recent decades, dramatic changes have occurred behind impressive facades. The extent of change is largely underestimated and its future implications are not even remotely known. Today, globalization and the information revolution precipitate profound changes in the structure, capabilities and functions of universities. Just consider the latest innovations in teaching by MIT and other universities which, through massive open online courses (MOOCs) deliver their content around the world, and often do so for free.

Electronic media have shaped education and innovation into pillars of democratization. The third leg of the tripod providing stability consists of the rise of new informal relationships which convert exclusivity into participatory inclusiveness. Wikipedia statements shaped by many eager participants replace the decisions by the greying editors of the Oxford dictionary not necessarily for the worst. Informal learning replaces the uniqueness of institutional learning. Networks substitute for formal classrooms, and external knowledge rivals the importance of internal knowledge. As the Institute for International Education stated in its 2010 Open Doors report, the growing mobility of students and faculty also contributes to increased relationships, knowledge exchange and informality.

Throughout all these shifts, universities continue to rank among the oldest and most successful institutions in human history. Many countries have recognized the key relevance of the education sector for sustainable growth and broad based prosperity, though the transformational role of academic influence is often feared but not yet fully understood. Countries devote financial and political attention to the establishment and development of universities. Traditional knowledge exporters, such as the United States, Germany, France and England, strengthen their efforts to maintain a high share in the dynamically growing international academic market. These traditional exporters, according to a 2007 World Bank report by Sajitha Bashir, also recognize the economic benefits of bestowing internationally recognized qualifications on future decision-makers about infrastructure, engineering and economic acquisitions.

This post is part of a series by Michael Czinkota of Georgetown University and Andreas Pinkwart of Handelshochschule Leipzig on international business research and the new role of universities. Find Part 3 here.

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