Universities and Colleges as Economic Drivers

8. The International Dimensions of Higher Education’s Contributions to Economic Development

205 8 THE INTERNATIONAL DIMENSIONS OF HIGHER EDUCATION’S CONTRIBUTIONS TO ECONOMIC DEVELOPMENT Jason E. LanE anD Taya L. oWEns aBstraCt This chapter analyzes the role of higher education in international trade and investment. We first examine how colleges and universities address international measures in seventy institutional economic impact reports. These reports highlight three core areas of importance for institutions: educating international students, training a globally competitive workforce, and attracting international trade. We then review two of the more prominent international aspects of higher education: the movement of students and institutions across borders. With more students than ever traveling abroad, this chapter takes an in-depth look at current trends, national policies, and challenges regarding international student mobility. Finally, we examine a burgeoning realm of cross-border activity: multinational institutions and their role in foreign direct investment. Given the paucity of economic impact studies that directly address cross-border campuses and students, this chapter concludes by outlining a research agenda to inform a focused discussion of higher education’s international economic engagements. 206 LaNE aND owENs INtroDuCtIoN Analyses of higher education’s role in economic development tend to follow a domestic perspective. As discussed throughout this book, colleges and universities can be significant drivers of economic growth for the communities where they are located. These institutions improve the workforce, create jobs, foster innovation, and attract new business and industry. However, as globalization has fostered a worldwide market for goods and services, higher education is no longer a resource confined exclusively to the domestic domain. Both political and economic borders have become porous, allowing individuals and institutions to move more freely among nations and economies. Increasingly, the local impact of higher education needs to be understood through the global context in which it exists. Higher education institutions attract students and resources from beyond immediate communities, and indeed beyond national borders. As beacons for international investment, some colleges and universities believe they can support the development or expansion of international trade within their local communities. Moreover, they attest to play a critical role in developing a workforce that is globally competitive; a workforce that is crucial for helping existing businesses expand internationally and attracting international businesses to set up shop nearby. This vision of international impact purports that economic activities grounded in local communities expand as ever-mobile graduates relocate internationally and as institutions invest their own financial and academic capital in foreign markets, contributing to other economies. Despite the growing importance of higher education to international economics, there remain very few studies of these important economic contributions. There are two primary reasons for this omission. First, universities have only recently been thought of as having an important role in the international marketplace. Second, measures for determining the economic contributions of higher education at the international level are scattered throughout national and international surveys, as few agencies seek to compile this type of information. However, that such efforts are not (or cannot yet be) systemically analyzed does not signify that such activity does not occur or that it is marginal. International Dimensions 207 The purpose of this chapter is to examine the intersection of higher education institutions and the international aspects of economic development. In part one of this chapter, we explore the extent to which institutions in the United States consider the international dimensions of economic development in their own activities. We examine , through a content analysis, seventy economic impact reports produced by U.S. postsecondary institutions and systems in the last decade. Part two discusses policy and measurement issues concerning the economic impact of international student mobility, the largest component of the international trade of higher education. Part three focuses on the emergence of cross-border higher education as a form of foreign direct investment. The chapter concludes by setting forth a research agenda focusing on the growing role higher education plays in international trade and investment. part I: INstItutIoNaL pErspECtIvEs— thINKINg gLoBaLLy For at least three decades, colleges and universities have produced economic impact reports to demonstrate their local economic contributions ; and, mostly for public institutions, demonstrate the return on investment of state appropriations to higher education (Leslie & Slaughter, 1992; Siegfried, Sanderson, & McHenry, 2007; McHenry, Sanderson, & Siegfried, 2012—chapter 3 in this volume). These reports serve as institutions’ primary statements about the depth and breadth of their economic engagements. As such they serve as an exemplary means for understanding the dimensions with which institutional leaders prioritize, measure...