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back to index backEUROtalk October,  2005


Knowledge Economy: Why Universities Threaten Europe's Competitiveness

Europe's ambition to become the world's leading knowledge economy” by 2010 is menaced by its failing higher education system, warns The Economist.

Knowledge is slowly replacing physical resources as the main driver of global economic growth. Top companies now spend at least a third of their investment on knowledge-related intangibles like R&D, licensing and marketing. Universities act as a key engine in the knowledge economy by producing intelligent workers and supplying much of its backbone (laboratories, libraries, computer networks etc.).

Yet although home to some of the world's oldest universities, Europe now trails far behind the rest of the world in the academic league tables. 17 of the world's top 20 universities are now located in the USA. This is mainly due to higher government spending and the greater freedom enjoyed by U.S. universities to charge fees and draw on a wide range of funding. However, America is not the only competitor in the global knowledge market. Other countries like Singapore and India have also decided to work smarter, not just harder and are busy improving their higher education systems. If Europe does not reform its universities fast, it may be overtaken by Asia's knowledge economies too.

Source: Egon Zehnder - GAI


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