The Private Sector Role in Global Higher Education [Inside Higher Ed]

by Doug Lederman for Inside Higher Ed

In many countries, as in the United States, demand for higher education is growing fast, sometimes outstripping the ability of traditional colleges — which, in many countries, means government-run institutions — to fulfill the need.

The extent to which private institutions, be they for-profit or nonprofit, are the answer (or part of it) to meet the demand varies from country to country, with some openly embracing the private sector, others keeping them out, and still others intrigued but wary. Wednesday night, dozens of international higher education officials, investors, and others gathered in Washington for the start of a three-day meeting sponsored by the International Finance Corporation, a World Bank agency that aims to build the private sector in developing countries.

And to kick off the meeting, the group turned to Douglas L. Becker, chairman and chief executive officer of Laureate Education, Inc., whose company has built a 300,000-student, $2 billion a year enterprise by focusing solely on creating private institutions in foreign lands — so far, 70 campuses in 17 countries.

Perhaps not surprisingly, given Laureate’s bleeding-edge success, Becker sees a bright future for the private sector in international higher education — but not without some likely hiccups along the way, and only if the providers act more as “welcome allies” than as “unbidden guests,” to borrow phrases from the title of his talk.

After briefly describing Laureate’s operations (which have grown by 30 percent a year for more than six years now), Becker laid out an international landscape in which demand for higher education among 18- to 24-year-olds is growing by 10 percent a year, drawing ever more institutions into the market seeking to meet the burgeoning demand that countries’ government cannot.

Gone, he said, are the days when would-be providers of private higher education were satisfied creating vocational schools; and with the heightened ambition of those institutions has sometimes come more scrutiny and suspicion.

“As institutions have gotten more ambitious,” Becker said, “that has paved the way for some conflict with the public sector” in those countries. ” ‘Wait a minute, it was okay when we were going to let you open a secretarial school. But you want to open a medical school? You want to do sponsored research?’ ” he said, channeling government officials in some countries. (Laureate has both created medical schools and engaged in significant research; in Chile, for example, it is the largest private recipient of federal research funds, he said.)

Becker said that the onus will be (and should be) on would-be private providers of higher education to behave in ways that will ease the suspicions of government officials — and to perform well. Institutions, he said, need to be “relevant to the work place” — they need not be vocational, as many of Laureate’s universities are not, but they should focus on producing “workers who can contribute to the economy,” defined locally by the specific needs of each country.

And they must be accountable, he said, to prove that the education they are providing is worthwhile. He applauded efforts under way in Europe, through the Bologna accords, to create a common “qualifications framework” for institutions and their graduates, and in Chile, which has created and already revised a new system of accreditation. Government should set standards high, he said, so that not just anyone can pull into a foreign country “and say, ‘Let’s create a university, let’s put on a show.’ ”

“Left completely to its own,” Becker said, “the private sector will go into every crack and crevice it can find…. The threat to the reputation of the private sector doesn’t come from the people who are in this room. It comes from the people who, either purposely or accidentally, aren’t going to be able to meet the standards set by government.”

Some institutions will inevitably run afoul of those standards, he predicted — “we will see cases of universities having their licenses pulled” — and that will be “very painful,” but it will be “part of the process” that ultimately leads to full acceptance of the private sector.

The conference continues today.