Higher Education and Economic Development: India, China, and the 21st Century

SCID Working Paper 297





In this paper, I assess predictions about economic development in four potentially leading economies, Brazil, Russia, India, and China, (known as the BRIC countries), focusing mainly on India and China, in terms of one key element in the growth process—human capital, especially higher-end human capital. I will argue that in the new information economy, university educated labor is crucial to economic development. Although all of these economies have other strengths (cheap labor, large internal markets, high levels of industrialization, and, in the case of Russia, enormous reserves of natural resources), much of their possibilities for sustained growth in the medium and longer run depend on whether they can develop and utilize high level human capital for the organization and innovation required in today’s (and tomorrow’s) global information economy. This does not mean that the quality of education at lower levels of schooling is not also important. At least two of the countries, Brazil and India, still have serious problems with educational quality (and, in India, even quantity) at lower levels of schooling. However, since one of the main features of the new global knowledge economy is the increasingly important role of the quantity and quality of higher educated labor, we focus on these four countries’ university systems and where they are headed. Economists have focused mainly on the quantitative aspects of higher education—the number of graduates in the labor force—in assessing whether an economy is allocating resources for maximum growth. In these terms, Russia is in a favorable position, with a large stock of highly educated people available for its current and future labor force. China is expanding its higher education system the most rapidly, and India, the least rapidly.