The Australian

By Dr Sean Gallagher

This month's speech by Julia Gillard to the US congress was a departure for an Australian prime minister. Beyond the well-worn themes of shared values and interests, Gillard went out of her way to extol the transformative power of education. "Achieving prosperity while sharing its benefits requires far-sighted educational reforms," she told the joint sitting. In Barack Obama, she was preaching to the converted. The two leaders believe that significantly boosting higher education numbers is the road to ever greater prosperity. Only a few days earlier in Florida, the President repeated his pledge to deliver 5 million more college graduates by 2020. For her part, Gillard has set a target of 40 per cent of Australia's 25- to 34-year-olds attaining a degree by 2025.

But is more higher education really the panacea Gillard and Obama believe? Nobel Prize economist Paul Krugman gives an emphatic no.

In a recent New York Times opinion piece he highlights evidence that the US job market has been "hollowing out" since 1990, with good middle-class jobs in medical diagnosis, legal research, and computer chip design increasingly lost to cheaper labour in the developing world or to technological innovations at home.

Krugman does not question the importance of higher education. Instead, he is warning against believing that more higher education, of the kind we presently have, will in itself produce the good jobs of tomorrow.

Higher education must adapt to the 21st century job market. Australia and the US would do well to learn the lessons of Singapore and South Korea.

In South Korea, higher education is a national obsession. In half a century this country jumped from being one of the poorest countries to one of the richest, largely thanks to educating its people. The government has now reached its desired national level of about 58 per cent of 25- to 34-year-olds with a degree, a figure that leads the world.

But Ha-Joon Chang, a reader in political economy at the University of Cambridge, says that Korea has gone too far.

"Continuing to enrol more and more students produces diminishing returns and eventually becomes a zero-sum game," Chang says.

A Korean university education is now essential for many jobs that patently do not require one because most applicants have a degree. Still the cycle goes on. By 2025, the political pressure from South Korean parents will see nearly 80 per cent of 25- to 34-year-olds with degrees. The obsession with credentials is all the more misguided considering Korea's emphasis on rote learning, which militates against the creativity needed to generate good jobs in new industries.

Contrast Singapore. As an island nation, it is even more natural resource-barren than Korea; and it too has chosen to fuel a knowledge economy through higher education for 60 per cent of its people. But unlike Korea, Singapore is experimenting with new models of research and education, and it has successfully attracted some of the US's leading universities to partner local institutions for this purpose. The National University of Singapore and Yale University are working to establish an American-style residential liberal arts college, a first for Asia. The doors of the joint venture are expected to open in 2013.

It will translate the best of Yale's undergraduate education into an Asian context with a pedagogy centred on critical thought and a curriculum spanning Western and Asian cultures. This new liberal education will position students to contribute to economic and social advancement, giving Singapore a competitive edge in the kind of creativity and soft skills notoriously absent in Asia.

The new Singapore University of Technology and Design is being established in collaboration with the Massachusetts Institute of Technology as a laboratory of interdisciplinary education, self-directed conceptual learning and real-world experience. Students are organised in small learning communities, nurturing the skills and creativity required for innovation, leadership and entrepreneurship. This $700 million gamble funded by Singapore aims to produce the next generation of pioneers in architecture, engineering and information systems.

Singapore is tackling the future challenge head on. While the benefits of these new joint ventures will take years to fully realise, Singapore's recently completed 10-year plan to attract many of the world's best universities has been successful in enriching and transforming its higher education.

What are the lessons for Australia and America? Creating more good jobs depends on innovation in higher education, not just more higher education.

By 2025, there will be more Australians with degrees than ever before. This is an important first step, but it will be wasted if graduates haven't also been skilled to be the leaders and the thinkers of the 21st century. Achieving prosperity aspirations will require far-sighted reforms beyond a policy of funding universities on student demand alone.

This is only half of what is required. There should be financial incentives to encourage Australian universities to strategically transform degrees, to experiment with new models of education, and to equip graduates with the new skills and knowledge demanded to compete in an increasingly globalised job market.

Sean Gallagher is a research associate in American higher education and chief operating officer at the US Studies Centre at the University of Sydney.