1.2 Key Trends Shaping Asian Higher Education

Trends 1: Economic Dynamism

Asian economic dynamism often refers to sustained economic growth. Even though the economic capacity differs between and within Asian countries, most have experienced rapid economic growth and industrialization either continuously for afew decades or intermittently over the past half-century. In particular, East Asia has registered what is widely's recognized as the longest economic booms in modern times: This includes the Japanese economic miracle from the 1950s, the economic uplift of the Four Asian Tigers of China Hong Kong, China Taiwan, Singapore, and Republic of Korea from the 1960s, and the strong impact of the economic boom in China since the 1980s.

Asia is the fastest growing economic region and the largest continental economy in terms of GDP purchasing power parity (PPP) in the world (Figure 1.3-1.4). China, India, and Japan are the first, third, and fourth largest economies by GDP PPP in theworld, respectively. Singapore registered as the world's third highest per-capita GDP PPP (Figure 1.5). United Arab Emirates, Saudi Arabia, and Hong Kong SAR of China are among the world's highest level of per-capita GDP PPP. Eight home countries of the AUA members—China, India, Japan, South Korea, Indonesia, Saudi Arabia, Thailand, Malaysia—have the largest economies in Asia in terms of both GDP PPP and nominal GDP. Also, United Arab Emirates, and Singapore are ranked among the largest Asian economies in terms of nominal GDP.

Notwithstanding inherent economic and developmental challenges, Asia is forecast to continue to enjoy economic growth over the coming decades. Rising domestic, regional and international demand and supply will continue to be fueled by population growth and structural transition, rapid urbanization, increased connectivity within and beyond the region, a larger and better-educated work force, and an expanding and increasingly affluent middle class.

Trend 2: Demographic Transition

Asia is perhaps most defined by its wealth of human resources. As the largest and most populous continent in the world, the Asia-Pacific region hosts 4.16 billion people or about 56% of the world population in 2015 in an area that covers about 23% of the land on earth. Asia hosts six of the world's ten most populous countries: China, India, Indonesia, Pakistan, Bangladesh and Japan. The first three alone account for 40% of the world population.

This populous region is experiencing significant changes in the scale and structure of population. Asia's population size has tripled in the last 65 years and is expected to add another 680 million by 2050. A demographic dividend definedas an increase in per capita income could be attributed to such demographic transition. Asia has experienced sweeping demographic opportunity in terms of a falling share of youth population (Figure 1.6) with a rising share of working age population to support them since the 1970s (Figure 1.7). This demographic dividend has contributed to about 39% to 42% of economic growth in developing and developed Asia-Pacific countries from 1970 to 2010⁽²⁾.

There are two main challenges to Asian's development path. One challenge is the sheer number of young people, that is, 1.7 billion or more than half of the world under-25 population⁽³⁾. The other challenge is the transition to an ageing population, which is defined as having more older people than those in the workforce. China, Republic of Korea, and Thailand have just passed the peak of working age population in 2015 in terms of both size and share of age. Japan passed this peak in 1995 while South Asian and Southeast Asian countries such as India, Myanmar, Malaysia, Indonesia have two to three decades to leverage demographic dividends until the share of their working age population peak around 2040-2050.

The key to reaping a demographic dividend and advancing human development regardless of stages in demographic transition is to enhance employability through investing in quality education and skills training all along the path from education to employment. With an ageing population in perspective, it is especially important to rely on higher education to enhance people's productivity across longer lifespans as well as to cater for the needs of an ageing population. Moreover, it is also important to empower more women to participate in the labor market, especially in high-skill and high-paying jobs. The key to reaping a demographic dividend and advancing human development regardless of stages in demographic transition is to enhance employability through investing in quality education and skills training at all stages along the path from education to employment to retirement.

Trend 3: Rapid Urbanization

Urbanization generally refers to the increase in the proportion of people living in towns and cities. Rapid urbanization has been both a driver and a result of economic and demographic growth across Asia. Urbanization in Asia is mainly driven by natural population growth, internal migration from rural into urban areas, and the reclassification of rural areas into urban areas. Whereas the majority of the world's rural inhabitants live in Asia, urban population in Asia is growing faster than in any other region (Figure 1.8-1.9). Asian population is projected to reach 64% of total population by 2050⁽⁴⁾. In this way, Asia will continue to host nearly one half of the world's urban population. Both ageing populations and rising migration, especially those with highly youthful migrants, highlight the imperative to redevelop urban infrastructure and services to meet the needs of current and future urban dwellers.

Further, Asia hosts the world's fastest growing cities. Seven of the ten most populous cities of the world are in Asia, namely Tokyo, Delhi, Shanghai, Bombay, Beijing, Dhaka and Kolkata. Overall, megacities (with populations over 10 million) and metropolitan areas (with populations between one and 10 million) account for 11% and 29% of Asia's urban population, respectively⁽⁶⁾. By 2025, the total number of megacities worldwide is expected to reach 37 including 22 in Asia⁽⁷⁾. The fastest growth in city development since 2000 has come from medium-sized cities and cities with less than one million inhabitants located in Asia.

A pressing issue is that urban growth in many Asia countries is neither environmentally nor socially sustainable. Excessive consumption and production models of urban growth have caused “big city disease” with mounting issues such as poor air quality, clean water supply, waste and sanitation management, traffic congestion, and excessive competition due to scarcity of education and health services. Since most Asian universities are located in large and medium-sized cities, whereas sustainable campus development may contribute to sustainable urban development, the campus ecosystem is still conditioned and challenged by the wider physical and social urban space. Moreover, university education and research are crucial to talent and knowledge concerning government planning in cities and improve smart and sustainable urban governance and development.

Trend 4: Holistic Human Development

Human development has improved across the world since 1990, and South Asia and East Asia are regions that have achieved significant human development progress, according to the Human Development Report 2016 (Figure 1.10). The Human Development Index (HDI) measures achievements in health (life expectancy at birth), the standard of living (gross national income per capita) and education (mean of years of schooling for adults aged 25 years and more and expected years of schooling for children of school entering age). Supported by increased investment in education, the demographic window in Asia has contributed to raise the participation rate and improve equity in access to all levels of education. Strong early investments in education and health are well studied as a major force in driving the East Asia miracle of sustained economic growth and social development⁽⁸⁾.

Most Asian countries have improved the literacy rates among the youth and achieved nearly universal primary education over the past few decades. In recent years,secondary education has expanded more rapidly in Asia-Pacific than in other world regions. East Asia has achieved universal coverage in lower secondary education and Southeast Asia and South Asia have also achieved about 80% in gross secondary school enrollment rate (GER). All AUA countries except for Sri Lanka have achieved over 70% in overall secondary GER. Japan and Republic of Korea had already achieved universal access by 1995, China and Indonesia have increased about 43% and 35% while Hong Kong SAR of China, Malaysia, Myanmar, Sri Lanka, and India have also increased around 20% to 30% in overall secondary GER from 1995 to 2014 (Figure 1.11).

Nevertheless, Asia is facing a challenge of sustaining universal primary education, scaling up enrolment in a diversified secondary and higher education sectors, and enhancing relevance and responsiveness of education in face of changing labor market need. In the context of more than half of the 18-24 years of age cohort still going to the labor market directly from secondary schools in Asia, increased enrollment in secondary education offers more options for employment and raises aspirations for pursuing further learning in tertiary education at different points in life. However, a challenge is to promote closer links between education and work and enhance relevance and responsiveness of education, especially through vocational and technical education in both secondary and tertiary sectors⁽¹⁰⁾.

Trend 5: Rising Global Presence

Many Asian countries have risen in their capacity to project themselves to the global scene though participating in the process of globalization over the past two decades. Several Asian countries have taken the lead among emerging countries in global presence among about 100 countries during the 1990-2016 period⁽¹¹⁾. China rose from the 13th place in 1990 and 2nd place in 2016. Thailand, Bangladesh, Singapore, and Malaysia have also rose significantly during the same period. They have become major world producers and exporters of manufactured goods. Although the rising power of Asia is primarily driven by the economic growth of China and India, it is also driven by the rise of soft power of many Asian countries in areas such as education, science, technology, and tourism.

Trends 6: Expanding Higher Education System

Higher education is a key national development strategy for many Asian countries. As Asia is rising in economic power, many Asian countries have adopted strategies to scale-up higher education systems through rapid enrolment expansion. In 1995-2015, the percentage improved in tertiary GER was 36%~47% in China, Republic of Korea, Saudi Arabia, and Singapore (Figure 1.13). This registered among the world's fastest increase in tertiary GER over the past two decades. Moreover, during the same period the percentage improvement in tertiary GER also reached an impressivegrowth of 20%~29% in India, Indonesia, Japan, and Thailand and 10%~15% in Kazakhstan, Malaysia, and Sri Lanka⁽¹²⁾.

Asia has the world's largest tertiary system in terms of total enrolment. Japan, Republic of Korea, Singapore, Hong Kong SAR of China, Saudi Arabia, Thailand, and big cities and wealthy provinces of Zhejiang and Jiangsu of mainland China have all entered the universal higher education system with over 50% of tertiary GER. China and India host the two largest national tertiary systems in the world. China reached 36.5 million in tertiary enrollment in 2015⁽¹³⁾, raising GER from 4.5% in 1995, 19.3% in 2005 to 43.4% in 2015 and aiming at reaching 50% in 2020. India reached 34.2 million in tertiary enrollment in 2015, raising GER from 5.5% in 1995, 10.7% in 2005 to 25.5% in 2015⁽¹⁴⁾. Among the countries with the highest tertiary GERs in Asia in 2014 are Republic of Korea (95.3%), Singapore (69.8%), and Japan (63.3%).

Major drivers of mass higher education development generally include rapid economic growth, societal systemic changes, and in some cases Confucian traditions⁽¹⁵⁾. Closely connected to these three factors are major demographic changes that are significantly shaping the demand and supply of education opportunities in Asia⁽¹⁶⁾. In China, for example, the share of 0-14 age cohort in total population dropped from 30.9% in 1985 to 25.1% in 2000, then 17.2% in 2015, while the share of 15-64 age cohort rose from 64.0% to 68.3% then 73.2% in the same period. During this time, education enrolment in China continued to expand, beginning with the primary sector in the 1980s to the secondary sector in the 1990s and then the tertiary sector since 1999. Between 1995 and 2015, new and total undergraduate enrollment in regular higher education sector in China expanded eight and nine times, respectively⁽¹⁷⁾.

Major challenges during and after scaling-up of higher education systems include: demand for increased funding from both public and non-public sources; stratification within higher education system and pressure for clear and creative positioning of individual universities within the system; increased competition for students and universities; regional and social disparities in access to and quality of education; misalignment between secondary schools and universities and between universities and the world of work, and; the imperative to reform and innovate leadership and governance at multiple levels.

It is worth noting that many Asian countries, such as Thailand, Kazakhstan, Malaysia, China, Sri Lanka, Indonesia, Myanmar, and Singapore, have higher female enrolment rates than male enrolment rates in tertiary education (Figure 1.14). This gender trend in Asian tertiary education reflects the global picture that the majority of countries now have more females than males in tertiary education. This trend manifests the progress in advancing girls' access to quality education and women's empowerment in recent years. Nevertheless, “gender equality remains a persistent challenge for countries worldwide and the lack of such equality is a major obstacle to sustainable development”⁽¹⁸⁾.

Trends 7: Rising Global Positions of Asian Universities

As Asian higher education continues to expand, its global reputation rises with it. A diversity of rankings at national and international levels have proliferated ever since the first two, the Academic Ranking of World Universities (ARWU) by the Shanghai Jiaotong University in China and the Times Higher Education and Quacquarelli Symonds joint World University Rankings (THE-QS), were published in 2003 and 2004, respectively.

The concept of “world university rankings” has become part of the zeitgeist of higher education. Even though university rankings have received criticismconcerning methodological robustness, objectivity, and transparency, the trend is that they are here to stay. The rankings have become an essential tool for global branding, ranking broadly refers to an approach to evaluating the universities' positions in the international scene. The rankings offer an easy-tocommunicate tool to evaluate a university's position in the international scene and that of a national or regional higher education system, and to understand the characteristics of a leading university as compared to its peer group.

The rising global reputation of Asian universities is manifested by an increasing number of Asian universities breaking into, as well as moving upward in world league tables over the past decade, presenting a larger Asian presence in the global excellence in higher education. For example, the ARWU listed 15 Asian universities in top 100 (15% of world total) and 126 in top 500 (25.2%) in 2016, compared to only nine Asian universities in top 100 (9%) and 100 in top 500 (20%) in 2007⁽¹⁹⁾ (Figure 1.15 and 1.16). A rising tide between 2007 and 2016 is that not only more Asian universities reached the top 500 group, but also more of them in each 100-ranking band as many of them moved up the ladder within this top 500 group.

The rich diversity of excellence among Asian universities is illustrated by the wide distribution of their home countries across Asia. The top 300 in THE Asian University Rankings are represented by 21 countries across Asia, including ten out of 12 AUA member countries: Japan (69), China (China mainland 54 and Hong Kong SAR 6), Republic of Korea (26), Thailand (10), Malaysia (9), Saudi Arabia (4), United Arab Emirates (3), Indonesia (2), Singapore (2), and Sri Lanka (1).

Trends 8: Relocating Research to Asia

Asia has experienced increases in the quantity and quality of academic research, driven by increases in the number of active researchers and investment in research and development (R&D). Asia is spending more than ever on R&D in terms of the proportion of R&D expenditure in GDP (GERD/GDP), employing more researchers and producing more publications, and Asia achieved the largest world share in these three aspects between 1996 and 2013/2014 (Figure 1.17).

First, strong growth in R&D spending reflects the growing acceptance of investment in science and technology as a driver of economic and social development. Hong Kong SAR of China, India, Republic of Korea and China doubled R&D and Malaysia tripled its national spending in R&D between 2000 and 2013. Republic of Korea had the world's highest level of R&D expenditure in GDP at 4.15% in 2013. Japan, Singapore and Indonesia also have about 10% to 47% increase in R&D spending (Figure 1.18).

Secondly, strong growth in researcher intensity is exhibited in that India and Republic of Korea nearly doubled, Thailand nearly tripled, while Malaysia increased six times in the number of researchers in R&D per million people between 2006 and 2015. Republic of Korea with 7,087 per million people in 2015 and Singapore with 6,658 per million people in 2014 held the highest researcher intensity in the world, while Japan has maintained the level of close to or above 5,000 at least since 1996 (Figure 1.19).

Thirdly, Asia achieved strong growth in research output. The number of scientific and technical journal articles increasing 2.8 folds in Asia while the world total increased 1.7 folds between 2002 and 2014 (Figure 1.17). In the decade between 2006 and 2016, Indonesia grew 12.5 times in scientific and technical journal articles, Kazakhstan, Malaysia and Saudi Arabia grew about five to seven times, Myanmar increased nearly four times, China, Thailand, United Arab Emirates, Sri Lanka and India increased two to three times, respectively (Figure 1.20).

Malaysia presents a striking case in the development of higher education and academic research. Malaysia adopted the Vision 2020 Strategy (Malaysia: The Way Forward) in 1991 with the goal to transform the nation into a high-income knowledge-based economy by 2020. Key targets critical to achieve this vision include by 2020 to raise the proportion of R&D spending in GDP to 2%, raise the participation rate in higher education from 40% to 50%, to raise the share of science, technology and mathematics students at university level to 60% of the total, to create five Apex Universities with world-class excellence, and to become the sixthlargest global destination for international university students and increase the number of international students to 200,000⁽²⁰⁾. The Ministry of Higher Education was established in 2004 with the goal to meet the nation's human resource development needs and make Malaysia a center of higher education excellence by the year 2020. The National Higher Education Strategic Plan beyond 2020 and the National Higher Education Action Plan 2007-2010 were adopted in 2007 and the Malaysian Qualifications Agency (MQA) were established in the same year. Between 2000 and 2013, Malaysia's researcher density, scientific and technical journal articles andcitations have increased impressively at both Asian and global scales. About 70% of Malaysia's research publications were produced by the five research universities in 2005-2012, indicating the strength of the APEX strategy. Moreover, the global and Asian positions of five APEX universities rose markedly across 2014-2015 in the QS rankings⁽²¹⁾.

Notwithstanding these achievements, Malaysian tertiary GER rose from 30.3% in 2007 to 37.1% in 2010, and then fell to 26.1% in 2015⁽²²⁾. A significant budget cut in public universities followed the Malaysia Education Blueprint 2015-2025 (Higher Education) by the Ministry of Higher Education in 2015⁽²³⁾. The Malaysian government decided to move away from the blanket funding and block grants for public universities irrespective of performance in order to enhance financial sustainability and stimulate accountability, efficiency and revenue diversification while maintaining the level of spending per student in public institutions. By 2015 government grants funded more than 90% of the expenditure of public higher education institutions. The five research universities have been affected most strongly by the budget cut. For example, in 2016 the University of Malaya had the most severe cut of 27.3%, three universities had the cut of 11.4% to 17.1% while a single fifth university had a budget increase of 5.1%⁽²⁴⁾. Malaysian universities are undergoing a further budget cut of nearly 20% in 2017⁽²⁵⁾. This vision to transform Malaysia higher education in the coming decade and the bold actions of financial restructuring provide both a challenge and an opportunity to make far-reaching organizational and cultural changes within and beyond the higher education system.