英文【世界银行】高等教育促进南高加索经济增长

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November,2024

SouthCaucasus

TertiaryEducationforEconomicGrowthintheSouthCaucasus:challengesandopportunities.

KoenGeven,FelipePugaNovillo

P500971Education

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©2024TheWorldBank

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TableofContents

Acknowledgments 4

ExecutiveSummary 5

PolicyPriority1:Afterimprovingaccess,nowfocusonimprovingopportunities 6

PolicyPriority2:ImprovetheQualityandRelevanceofTertiaryEducation 7

PolicyPriority3:Increasefundingandimprovetheefficiencyandmanagementofspending 7

PolicyPriority4:Buildingtheinfrastructureandcultureforscientificresearch 8

1.TheImportanceofTertiaryEducationforEconomicGrowth 9

ThreeleadingrolesfortertiaryeducationineconomicgrowthintheSouthCaucasus 11

1.Theskillsroleoftertiaryeducation 12

2.TheInnovationRoleofTertiaryEducation 13

3.Spillovereffectsoftertiaryeducation 14

2:Whohasaccesstotertiaryeducation,andwhodoesnot? 15

3:QualityandRelevanceofTertiaryEducation 19

4:FundingforTertiaryEducation 27

5:ScientificResearchandTechnologyTransfer 31

6:Conclusion 34

QuickOverviewTertiaryEducationSystemsintheSouthCaucasus 36

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Acknowledgments

ThisregionalreportwaspreparedundertheleadershipanddirectionofShiroNakata(SeniorEconomist),RenataLemos(SeniorEconomist),andAnnaBerdzenadze(EducationSpecialist).WegratefullyacknowledgeexcellentresearchassistancefromFarahNadeem.TheauthorswouldliketothankthepeerreviewersRobertaMaleeBassett(GlobalLeadforTertiaryEducation),DiegoAmbasz(SeniorEducationSpecialist),forrelevantinsightsandsuggestions.WealsokindlyacknowledgevaluablecommentsfromRitaAlmeida(PracticeManagerforEducationinEuropeandCentralAsiaregion),MaiaChankseliani(AssociateProfessor,UniversityofOxford),MiguelEduardoSanchezMartin(SeniorEconomist,ProgramLeader),CindyAudiguier(SeniorEconomist)andparticipantsattheHigherEducationRegionalWorkshopintheSouthCaucasusonJune13,2024.TheauthorswouldalsoliketothankRolandePryce,CountryDirectorfortheSouthCaucasusregion,forheroverallguidanceandleadershipindevelopingthereport.

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ExecutiveSummary

PolicymakersintheSouthCaucasusregionallknowadifficulttruth:theperformanceoftheiruniversitiesisdisappointing.Noneoftheinstitutionsintheregioncanboastofaworld-classstatus;nonereachameaningfulrankinanyoftheuniversityrankings.Onaverage,asshowninFigureE.1below,thecountries’institutions,onaggregate,performmuchbelowwhatisexpectedgiventhelevelofeconomicdevelopment.Thisreportaimstohelppolicymakersinministriesofeconomicaffairs,ministriesoffinance,andministriesofeducationunderstandthissectorofnationalimportance.Evenmoreimportantly,ithopestoconvincetheleadersofthetertiaryeducationinstitutionsthemselvestotakeonchallengesfacingthissectormoredecisively.

FigureE.1:Universities’aggregatequalityscoreintheSouthCaucasuscountriesismuchbelowwhatisexpectedbasedonthecountries’GDPpercapita(thegreenline)

Source:DataonuniversityrankingsfromDemirgüç-Kunt,A.&Torre,I.,(2020).MeasuringHumanCapitalinEuropeandCentralAsia.WorldBankPolicyResearchWorkingPaper,IssueNo.9458.GDPpercapitafromWorldBankWDI.

Thereasonforthisstateofaffairshasmuchtodowiththechoicesthegovernmentsintheregionhavemadesinceindependence.Tertiaryeducationhasnotbeencrucialinthecountries’developmentplansoverthelastthreedecades.Someofthiswithdrawalwasforgoodreasons.AsthecountriestransitionedfromtheSovieteconomies,thenewlyformedstateswithdrewfrommanagingandfinancingthetertiaryeducationsector.Asdemandfortertiaryeducationgrewwithahighershareofyouthcompletingsecondaryeducation,newprivateuniversitiescameintobeing,whilethepublicuniversitiescouldsurvivebychargingtuitionfeestotheirstudents.Universitiesbecamemoreautonomousandlearnedhowtofendforthemselvesinthemarketeconomy.However,asthesecountries’economieschange,tertiaryeducationwillbecomeavaluablestrategicresourcefortheregion’seconomicdevelopment.

Governmentsintheregionareadvisedtotakeafreshlookattertiaryeducationbecauseitprovidesnecessaryskills,facilitatesinnovation,andhasspillovereffectsforsocietiesbeyondimmediateeconomicreturns.Inaworldoffast-changingtechnologies,thissectorhasamuchmoreimportantrole

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thanintheearly1990sor2000s.Notably,asthecountriesintheregionhavereacheduppermiddle-incomestatus,theeconomiesstruggletodiversifyandgrowthroughexports.Firmsthatcanplaythisroledemandworkerswithmoreadvancedskills,includingtechnicalandbehavioralskills,thatstudentslearnintertiaryeducationinstitutions.Somefirmsintheregioncangofurtherandwanttoinvestinresearchanddevelopmenttobecomeregionalorevenglobalinnovators.Thesefirmsneedalocalscienceandtechnologyinfrastructurethatcanhelpthemontheirpath.Inotherwords,thecountriesneedtertiaryeducationtoavoidwhatthe2024WorldDevelopmentReportcallsthe‘MiddleIncomeTrap’.

Importantly,improvementsareneededinuniversities,butalsoinallothertypesoftertiaryeducationinstitutions,suchaspolytechnicsandprofessionalcolleges,whichhaveperhapsevenbeenmoreneglected.Universities,particularlythosethatdoresearchanddevelopment,areessentialforthecountries’firmstocomeclosertothetechnologyfrontier.However,firms’needsareoftenmodest:theyneedemployeeswithbasicprofessionalskills,includingthosewhocanspeakforeignlanguages,whocannavigateonlineservicesforprofessionalgoals,whocanhelptheirbusinesstransitiontocloudsoftware,andwhocanstayuptodatewithnewtechnologiesastheycomeout.Variousprofessionallyorientedtertiaryeducationinstitutionstypicallyprovidetheseskills.

Thisreportusesdataandevidencetoreviewfourkeypolicyprioritiesfortheregion:accessandinequity,qualityandrelevanceofprograms,publicfinancing,andscientificresearch.Theredthreadthroughoutthesefourareasisthattertiaryeducationinstitutionscannotaddressthesechallengesalone.Theyneedamuchmoresignificantrolefromgovernmentsindirectingastrategicvisionandfundingthesectorwhilemaintaininguniversityautonomyandacademicfreedom.

Thefocusofthereportisontertiaryeducationasasourceofeconomicgrowth,recognizingthattertiaryeducationhasotherimportantspillovereffects.Thereisplentyofevidencethattertiaryeducationalsohelpssocietiesbeyondeconomicreturnsintermsofimprovedhealth,resilience,awarenessofclimatechange,andbetter-governedsocieties.Scientificresearchisaglobalpublicgoodinandofitself,whetherithelpssocietiestounderstandtheirculturaltraditionsbetterorhelpsthemtofindacureforcancer.Thesenon-economicreturnsdonot,bydefinition,contrastwitheconomicreturns:non-economicandeconomicreturnsrequireaccessible,high-quality,relevant,well-fundedtertiaryeducationsystemsthatcombineteachingandresearch.

PolicyPriority1:Afterimprovingaccess,nowfocusonimprovingopportunities

Whilelargersharesofyouthhavegonetotertiaryeducation,universitiesintheregionhaveexperiencedvolatilestudentnumbersduetodemographicdeclines.Allcountrieshaveseenthepopulationintheagegroup20-24dramaticallydeclineinthelastdecade.InArmenia,thedeclineofyouthinthisagegroupwas40percent(from295thousandto174thousand);inAzerbaijan,itwas26percent(from966thousandto713thousand);andinGeorgia,itwas39percent(from359thousandto220thousand)between2010and2020.Thisperiodofvolatilityseemstobeoverintheimmediatefuture.Thisreportprojectsthatenrolmenttrendswillstabilizeinthenextdecade,thankstomoredemographicstabilityandanincreasingpresenceofinternationalstudentsintheregion(particularlyinGeorgia).Thisprojectedstabilityoffersanimportantopportunityforpolicymakerstodevelopandimplementamorestrategicpolicyagenda.

Addressinginequalityofopportunitycanbehelpfulinimprovingthequalityoftertiaryeducationforall.Highinequalityofopportunitysignalstoyoungpeoplethatabilityandeffortdonotmatterforsuccess,suppressingmotivationandcompetitionbasedonactualtalent.Thecountriesintheregionhavealltried

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toimprovemerit-basedadmissionsintertiaryeducationthroughcompetitiveexamsattheendofhighschool,whichnowseemtoreinforceinequalitiesratherthanreducethem.Furtherreformsarelikelyneededinpathwaystotertiaryeducation(e.g.,throughimprovedcounselingandremedialprograms),theexamsystems,thestudentsubsidysystem,anduniversityservicestoimproveaccessforyouthfrompoorerbackgrounds.

PolicyPriority2:ImprovetheQualityandRelevanceofTertiaryEducation

Thereareseriousconcernsaboutthequalityandrelevanceoftertiaryeducationintheregion.Asalreadynoted,theuniversitiesarerankedmuchbelowwhatshouldbeexpectedforthecountries’levelofeconomicdevelopment.Therearealsosignsofseriousproblemswithacademicintegrity,althoughnocomparativedataisavailable.Perhapsmostworryingly,wagereturnstotertiaryeducationaremuchlowerthanincomparablecountries,particularlyArmeniaandGeorgia.Whiletertiaryeducationgraduatesdobetterthangraduatesfromsecondaryeducation,asubstantialnumberofgraduatesendupinlow-skilledjobsforwhichtheywouldnotneedtertiaryeducation.

Whatisworseisthatthereareindicationsthattertiaryeducationinstitutionsthemselvesbelievethattheireducationiswellalignedwiththelabormarket.Incontrast,graduatesandemployersoftencomplainaboutlowqualityoralackofamatchwiththelabormarket.Firmsintheregionoftendemandnewtypesofskills,suchascommunicationskills,teamwork,criticalthinking,andproblem-solving,whicharenotstandardizedacrosscurricula.

Givenuniversityautonomyandalackofclarityofwhatthelabormarketdemands,thesolutionstothisproblemaremanifold.Forone,morediversityintheirinstitutionsandprogramsisneeded.Thiscouldincludeprofessionaldegrees,shortdegrees,micro-credentials,part-timeprograms,dualdegrees,orothertypesofeducationcateringtoprofessionalskillsinhighdemandinthelabormarket.Tertiaryeducationinstitutionswouldalsoneedtoattractbetterprofessors,whichwilllikelyrequireanewcareersystemforprofessors.Actionsarenecessaryforacademicintegrity,whichrequiresbothtoolstoenforcecompliancewhileprovidingtrainingandresourcestoimprovetheculture.

PolicyPriority3:Increasefundingandimprovetheefficiencyandmanagementofspending

Oneofthecriticalleversthatinfluencethequalityofeducationistheleveloffundingfortertiaryeducation.TheaveragecountryintheEU-28spendsabout8timesmorethanArmeniaandGeorgiaandaboutsixtimesmorethanAzerbaijan.Theregion'stertiaryeducationsystemsrelymainlyontuitionfeesfromstudentsandfamilies,andgiventhatmarketforcesdeterminethese,itisunlikelythatthesecanberaisedmuchmore.Asstudentnumbershavebeensomewhatvolatile,therelianceontuitionfeeshasalsointroducedchallengesininstitutionalfinancialplanning.Overthenextdecadeorso,institutionalfundingisexpectedtobemorestable,givenprojectedenrolmentstability.Thiswouldbeanopportunitytorethinkthepublicbudgetfortertiaryeducation.

Publicfundinglevelsfortertiaryeducationaretoolowtoprovideinstitutionswithastablebasetofinancequalityeducation.Governmentscouldincreasethebaselevelswithaclearplanfortheinstitutionsregardingwhatneedstohappentoimprovethequalityandrelevanceofthedegreeprograms.Governmentscouldalsouseadditionalpublicfundingtoincentivizeinstitutionstoraisetheirowncapital(e.g.,privatecapitalforuniversityinfrastructureprograms,sellingorrentingoutassetsthatarenotbeingused,orincreasingcommercialactivities),therebyleveragingadditionalfunds.Additionalrevenuescan

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alsobebroughtinthrough(further)increasingthenumberofinternationalstudents,trainingprogramsaimedatprofessionals,internationalpartnerships,andcontractresearch.Atthesametime,governmentscanconsidermechanismstoimprovetheefficiencyofinstitutionalspendingandthetransparentmanagementoffunds.

Oneareathatneedscontinuedattentionisthemerit-basedscholarshipsystemcommonlyusedintheregion(asinthebroaderpost-Sovietregion).Giventhehighinequalityinaccesstotertiaryeducation,itwouldmakemoresensetousethesescarceresourcesinlinewithpolicypriorities,suchasaddressingissueswithaffordabilityforstudentsfromdisadvantagedbackgrounds.Providingneed-basedscholarshipscouldstrengthensocialmobilityandleadtofairercompetitionbetweentalentsratherthanreproduceexistinginequalities.

PolicyPriority4:Buildingtheinfrastructureandcultureforscientificresearch

Innovativefirmsneeduniversitiesthatcanconductscientificresearchattheglobalfrontierofscientificdevelopment.Untilrecently,producingscientificresearchhasnotbeenaprominentobjectivefortertiaryeducationinstitutionsintheSouthCaucasusregion.Likemostpost-Sovietcountries,scientificresearchwasconductedatresearchinstitutes,whichwereorganizationallyseparatefromtheuniversities.Noneoftheuniversitiesintheregionproducescientificresearchatinternationallycompetitivelevels.OnlyGeorgiahastriedtointegratetheseinstitutionsintotheuniversities,althoughmuchworkisaheadtomakethisintegrationfunctional.Thepost-Sovietlegacycannotbeanexcuse;overthelastthirtyyears,Estoniahasbecomeaworldleaderinscientificresearchoutput.Estoniadiversifieditshighereducationintoprofessionalandacademichighereducation,mergeduniversitiesduringdemographicdeclines,andfundsscienceactively,stronglypositioningitselfininternationalresearchpartnershipssuchastheEU’sHorizonprogram.

Governmentsmustbuildscientificinfrastructureandpromotedynamicresearchactivitiestochangethisscientificresearchculture.Muchoftheuniversity'sinfrastructureandequipmentiseitheroutdatedornon-existent.Giventheirlackofbasefunding,universitiesintheregioncannotoffertenure-trackcareerstofacultythatcancompetewiththebroaderregion,letalonebegloballycompetitive.Whilestrategicinvestmentsinresearcharebeingmadeinallthecountriesintheregion,theseareoftensmallandhaveshorttimehorizons.Thegovernmentscouldchangethisbyconcentratingnewinvestmentsintargetedareaswherescientificcapacityexists(basedoncompetitiveprocessesusingscientificpeerevaluation).Inturn,thatwouldneedtobesupportedbycareersystemsattheuniversitylevelthatrewardscientificresearchoutput.

Ifthecountriesintheregionareseriousaboutgrowingtohigh-incomecountries,theywillneedtosolveanumberofthesepolicychallengessimultaneously.Thiswillnotbeeasy.Therearenosilverbulletsthatsolvealltheseproblems,norarethereanyquickfixes.Increasedpublicfundingwillhelp,butitwillnotguaranteeresults;withoutreforms,itisunlikelytotranslateintoimprovedoutcomes.Reformingtertiaryeducationwillrequirepoliticalcapitalatthenationallevelandmorepotentleadershipintheinstitutionsthemselves.Significantimprovementswilllikelybenecessaryforthegovernanceoftertiaryeducationinstitutions.However,noonepromisedthatitwouldbeeasytotransitionfromamiddle-incomecountrytoahigh-incomecountry;thedifficultyofthistransitionispreciselywhythemiddle-incomestatuscanbeatrap.

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1.TheImportanceofTertiaryEducationforEconomicGrowth

Keyinsights:

-AsallcountriesintheSouthCaucasuswanttotransitiontheireconomiesfromuppermiddle-incometohigh-incomestatus,theyneedtotakeafreshlookattheirtertiaryeducationsystem,whichprovidesavitalroleinthistransition.

-Tertiaryeducationcanproduceadvancedskillsthatarerewardedonthelabormarket,spurinnovationthroughtechnologyadoptionandscientificresearch,andsupportregionaleconomicdevelopmentaroundinstitutionalcampuses.

-Tertiaryeducationincludesdegreeprograms,short-cycleprograms,professionaltraining,andmicro-credentialsandcanbeofferedbycolleges,universities,polytechnicalinstitutes,professionalschools,andsoon.

-Thesedifferenttypesoftertiaryeducationareessentialbecausethelabormarketneedsmorethanjusthighlytrainedscientists;itneedsyoungpeoplewithabroadrangeofprofessionalandacademicskills.

ThisreportaimstohelppolicymakersandleadersintheSouthCaucasusregion,especiallythoseinfinance,economicaffairs,andeducation,tofindnewwaystogrowtheireconomies.Thethreecountriesintheregion,Armenia,Azerbaijan,andGeorgia,haveallreachedupper-middle-incomecountrystatus.Despitethatachievement,andmaybeevenbecauseofthat,eachofthesecountriesisstrugglingtoreachthenextsteps:todiversifytheireconomies,toincreasetheirproductivity,andtobecomeexportersinamoreextensivevarietyofsectors.Policymakersknowthisiseasiersaidthandone,asmostmiddle-incomecountriesmakethenecessarytransitionstooslowly.CountriesintheSouthCaucasusregionallfacetheriskofwhattherecent2024WorldDevelopmentReportcallsfallingintothe‘MiddleIncomeTrap

.’1

Thereisabroadrecognitionthathumancapitalplaysavitalroleintheeconomicgrowthofmiddle-incomecountries.Firmsrequireworkerswithstrongfoundationalskillsanddecenthealthtoimproveproductivity.Workersinmiddle-incomecountries,inturn,requirequalityjobswithsocialprotectionstobuildacareer.Skillsareneededsoworkersareproductive,healthisnecessarytostayproductive,andhigh-qualityjobsallowworkerstogrowrootsintheircommunitiessotheywon’tfeelpushedtomigrate.

Asthespeedoftechnologicalchangehasincreasedglobally,thisfoundationalhumancapitalisnolongerenoughtogrowfrommiddle-incometohigh-incomestatus.Firmsthatwanttobegloballycompetitiveneedworkerswithmoreadvancedskillswhocanusethelatestproductiontechniques.Theyneedworkerswhofollowthenewsintheirindustriesandcankeepuptodatewithnewtechnologiesastheyarereleased.Whiletheseadvancedskillsmaybeenoughtocatchupwithhigh-incomecountries,somefirmswillprobablyneedtogoevenfurtheranddothekindsofresearchanddevelopmenttobecomeglobalinnovatorsthemselves.Thesefirmsneedaccesstocutting-edgetechnologyattheso-called‘technologicalfrontier.’

The2024WorldDevelopmentReportarguesthatmiddle-incomecountriesneedtoimprovetheireconomies'productivitythroughcreativedestructiontobreakoutofthemiddle-incometrap.Regardlessoftheirsize,firmswillneedtocatchupwithtechnologicalchange,adoptingtechnologiesmuchfasterthantheydonow.Technologyadoptionhingesonwhetherfirmscanadequatelyidentify,nurture,

1WorldBank.2024.WorldDevelopmentReport2024:TheMiddle-IncomeTrap.TheWorldBank.

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andpromotetalent.Tocompetegloballyeventuallydependsonhowwellcountriescaninnovatetopushtheglobalfrontieroftechnology.

Allpolicymakersintheregionknowthattheirtertiaryeducationsystemsperformwellbelowexpectationsininternationaluniversityrankings,whichisasignoflowattentiontothissector.InFigure1.1,weplotacombinedqualityscorefortheuniversitiesintheregionbasedonaggregateuniversityrankingsrelativetothecountry’sGDPpercapita.Whileinformativeasanaggregateindicatorofsystemquality,therankingsprovidelittleinformationthatisdirectlyactionableforpolicymakers

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Moreover,therankingsonlymeasureasubsetofwhatisessentialaboutthetertiaryeducationsystem(seeBox1).

Figure1.1:AggregatedqualityscorebasedonuniversityrankingsrelativetoGDPpercapita

Source:DataonuniversityrankingsfromDemirgüç-Kunt,A.&Torre,I.,(2020).MeasuringHumanCapitalinEuropeandCentralAsia.WorldBankPolicyResearchWorkingPaper,IssueNo.9458.GDPpercapitafromWorldBankWDI.

Eveninhigh-incomecountries,universityrankingsdonotcapturethediversityofthetertiaryeducationsector.Tertiaryeducationinstitutions,includinguniversities,polytechnics,professionalschools,andcolleges,playacrucialroleinprovidingtheseskills(seeBox1).Unfortunately,policymakers,especiallythoseatthehighestlevelsofdecision-making,havepaidlittleattentiontoallthesetypesofinstitutions,andtheinstitutionsusuallydon’tdeliverwhatisexpectedfromthem.

ThisshortreportaimstolayoutinmoredetailhowtertiaryeducationinstitutionscanplayastrategicroleineconomicgrowthandwhetherthesystemsintheSouthCaucasusregionperformthisroleeffectively.Itwillstartbyreviewingtheevidenceontheroleoftertiaryeducationineconomicgrowth.Itwillthenreviewfourmaindimensionsoftertiaryeducationpolicy(enrolment,labormarkets,funding,andscience)usingthelatestcomparativedataavailable.Section2willreviewtheexpansionofthetertiaryeducationsysteminthecountriesintheregion,showingwhoattainstertiaryeducationdegreesandwhodoesn’t.Section3willreviewthereturnsfromtertiaryeducationonthelabormarket.Section4willreviewthefundingoftertiaryeducation.Finally,Section5willreviewthescienceproductionfromtheinstitutionsinthesector.

2Hazelkorn,E.Mihut,G.(eds.)2021.ResearchHandbookonUniversityRankings.EdgarElgar.

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Box1.TertiaryEducationisofferedin‘WorldClassUniversities’andmanyothertypesofinstitutions

Theterm‘tertiaryeducation’referstohighereducationandothertypesofpost-secondary

education,typicallyreflectiveofUNESCOISCEDlevels5-8.Thiscanincludeshorterprograms,suchasshort-cyclehighereducation(thatisoftenofferedatlevel5).Butitcanalsoincludeothertypesofcourses,post-graduatetrainingormicro-credentialsthatareofferedattheselevels.‘Tertiaryeducation’degreeprogramsorshortercoursescanbeofferedbyawidevarietyofinstitutions,includingcolleges,universities,polytechnicalinstitutes,professionalschools,andsoon.

Aspecifictypeoftertiaryeducation,offeredinwhatisoftencalled‘WorldClassUniversities’,oftenreceivesspecialattentionfromgovernments.Alreadyin2003,aleadingtertiaryeducationresearcherobservedthat‘Everyone[intertiaryeducationpolicycircles]wantsaworld-classuniversity.Nocountryfeelsitcandowithoutone.’(Altbach,2003).Sincethen,governmentshavetakenvariousinitiativestoestablishaWorldClassUniversity,whichisparticularlychallengingindevelopingcountries1.Byonecount,37governmentslaunched‘AcademicExcellenceinitiatives’between2004and2014,upfrom13suchinitiativesbetween1989and20041tocreatesuchuniversities.

IntheSouthCaucasusregion,therearenoinstitutionsthatcancompeteatthis‘WorldClass’level.Ifanything,theuniversitiesintheregionperformrelativelypoorlyonqualityscoresdevelopedfromuniversityrankingsasshownabove1.Nevertheless,thereisinterestintheregiontoestablishsuchinstitutions.ThegovernmentofGeorgia,forinstance,establishedtheKutaisiInternationalUniversityin2017withpreciselythisaiminmind.TheArmeniangovernmentisalsoconsideringconsolidatingitsuniversitysystemandplanningtoestablishan‘AcademicCity’thatcancompeteglobally1.

ThecountriesintheSouthCaucasusregionwouldlikelybenefitfromeachhavinganinstitutionthatcancompetegloballyintheproductionofint