Changing Higher Education

Globalization and inequality - and education

A recent International Monetary Fund working paper entitled “Rising Income Inequality: Technology, or Trade and Financial Globalization?” provides a fascinating look at the almost universal phenomenon of rising income inequality.  The abstract outlines the central conclusions of the paper:

We examine the relationship between trade and financial globalization and the rise in
inequality in most countries in recent decades. We find technological progress as having a
greater impact than globalization on inequality. The limited overall impact of globalization
reflects two offsetting tendencies: whereas trade globalization is associated with a reduction in inequality, financial globalization—and foreign direct investment in particular—is associated with an increase. A key finding is that both globalization and technological changes increase the returns on human capital, underscoring the importance of education and training in both developed and developing countries in addressing rising inequality.

The authors of this paper, Florence Jaumotte, Subir Lall, and Chris Papageorgio, do a remarkable job of looking at the roles of the interacting forces of technology, trade globalization, and financial globalization in producing this inequality.  Growth of inequality, they show, is widespread around the world, but with significant variations:

...inequality has risen in all but the low-income country aggregates over the past two decades, although there are significant regional and country differences. In addition, while inequality has risen in developing Asia, emerging Europe, Latin America, the Newly Industrialized Economics, and the advanced economies over the past two decades, it has declined in some sub-Sahara African countries. ....among the largest advanced economies, inequality appears to have declined only in France, whereas among the major emerging market countries ..., trends are more diverse, with sharply rising inequality in China, little change in India, and falling inequality in Brazil.

Laureate Education moves into the United States - a new direction?

 This week, the for-profit  leader in global higher education Laureate Education announced that it “has acquired NewSchool of Architecture and Design, based in San Diego, California, and has finalized its acquisition of Kendall College, based in Chicago, Illinois.”   Up to now, Laureate’s focus has been entirely on offshore institutions, and it has a physical presence in 18 countries - but not the US.  Do these new US acquisitions mark a shift in Laureate strategy?

I think the answer to this question is - no. I believe these acquisitions simply reflect another step in the roll-out of the existing strategy.  In a previous post, Interesting activity at the for-profit/non-profit interface: Laureate, I noted that Laureate had begun to seek US. accreditation for several of its off-shore institutions.  In the press release announcing the accreditation of Laureate’s Glion Institute of Higher Education and Les Roches Hotel Management School (both Swiss)  by The New England Association of Schools and Colleges Commission on Institutions of Higher Education, Laureate CEO Doug Becker noted that such “accreditation represents one of the highest standards for the assessment of universities”.  Thus Laureate is using internationally recognized US accreditation to support its strategy of branding itself as a high quality, medium cost higher education provider.  I think they strengthened this part of their strategy by adding  to their portfolio two existing, accredited institutions in the US.  Of course, the two institutions also need to fit into the existing network of universities in a way consistent with what we have seen of Laureate strategy, and we can hypothesize how these new purchases might be viewed in this context.