Latin America’s Learning Problem

Despite a decade of unparalleled economic growth Latin America’s universities are failing to make their presence felt on the international stage - LatAm INVESTOR investigates why...

Despite a decade of unparalleled economic growth Latin America’s universities are failing to make their presence felt on the international stage.

What happened?

Latin America’s universities have had another bad year in the worldwide rankings. There are three main indices and all are damning in their assessment of Latin America’s universities. The London-based Times Higher Education World University Rankings, the U.S. News and World Report /QS World University 2013 Ranking and China’s Shanghai Jiao Tong University Ranking do not have any Latin American university in their top 100.

"How is it possible that Brazil and Mexico, the world’s sixth- and 12th-largest economies, don’t have one single university among the world’s top 100 schools..?"

What makes these bad results particularly striking is that they come at a time when Latin America is growing in economic and geopolitical importance. As celebrated Latin American journalist Andres Oppenheimer notes in The Miami Herald the poor performance raises some difficult questions. “How is it possible that Brazil and Mexico, the world’s sixth- and 12th-largest economies, don’t have one single university among the world’s top 100 schools?”

Are they really that bad?

Not everyone agrees with the rankings. Some Latin American academics claim that the system is biased towards English-speaking, wealthy universities. The indices have different methodology but they have a heavy weighting towards scientific research, which suits universities with the funds to carry out lots of experiments. Moreover the rankings measure student-to-teacher ratios, which doesn’t suit Latin America’s giant – and often free - universities. Finally, the system measures the amount of citations a university achieves in English-speaking journals and how many Nobel Prize Winners it has produced – both metrics that favour the Anglo-centric universities. But despite these flaws there can be no denying that the rankings do highlight a problem. The world of science and technology is now largely conducted in English – something that universities in Asia or Europe have accepted and adapted to.

Will they improve?

To be fair to Latin American universities they are slowly climbing up the league tables. For example, nine out of Latin America’s top 10 universities in the QS rankings have moved up positions in the world index since last year. There has also been a rapid increase in the amount of published scientific research – albeit from a low base. Between 1995 and 2009 the number of Brazilian science papers multiplied by 3.6 times, increase by 3.8 times in Colombia and doubled in Mexico and Chile. University of Melbourne professor Simon Marginson, a member of the committees for the Times and Shanghai Rankings, notes that “since the mid-1990s Latin America has been the fastest growing region of world science, slightly ahead of Asia.” Many leading academics believe that ‘internationalisation’, the process by which a university attracts faculty members and students from around the world, can help Latin America. To that end Brazil has started a programme to send 100,000 Brazilian science and engineering graduates to get advanced degrees in U.S. and European universities, while Chile already has a similar scheme in place. Mexico was the latest to join the club with the recently-announced ‘Proyecta 100,000’ aiming to increase the number of Mexican students in U.S. colleges to 100,000 from the current 14,000 by 2018.The plan also works the other way by boosting the number of U.S. students going to Mexico to 50,000 from the present number of 4,000 by 2018.

How will they pay for it?

A large reason for the problem is the funding of universities in Latin America. In many countries, such as Brazil, Argentina, Mexico, there is a parallel system of public and private universities. The public universities often have a venerable tradition, leading scholars and considerable resources. But, because access to these universities is free, these assets are diluted by the sheer amount of students that use them. For example the National Autonomous University of Mexico (UNAM) and the University de Buenos Aires (UBA) have more than 300,000 students each. Then you have the private universities. For-profit institutions have sprung up around Latin America. Some are of good quality but many are simply capitalising on the massive demand for higher education. As The Economist notes, the for-profits have allowed governments “to expand higher education quickly without spending more” but the “mechanisms to ensure quality are weak or nonexistent”. Over the last three decades Latin America has made remarkable strides in extending access to higher education. But now it needs to improve the quality. And that is a question of funding. One of the most dramatic changes to university financing comes in Chile, where new president, Michelle Bachelet, has proposed a range of new measures, equivalent to 3% of GDP, to fund a free higher education programme. It’s an admirable aim but it remains to be seen how it will affect Chile’s economic competitiveness. A similar expansion of free university places under Hugo Chavez in Venezuela led to a drop in the quality of graduates. Perhaps the best solution would be a compromise whereby students receive subsidised loans or financing from the state. Countries like Ecuador and Mexico have extended their student loan system in recent years, though it will take time to see the effects.

Higher education is not just an academic issue

How does this affect investors?

This isn’t just an academic issue. As the OECD noted in its Latin American Economic Outlook, the lack of university research filters through to the real economy. “The productivity gap is a persistent problem for Latin America and the Caribbean. This reflects the limited diversification of the region’s economies, their specialisation in non-technology-intensive sectors, and scant investment in research and development (R&D) and in innovation.” In other words Latin American countries just aren’t investing enough in R&D. According to the OECD Latin American investment in R&D stands at just 0.6% of GDP compared to 2.3% in the developed world. Of course the private-sector needs to play its part. The graph shows that one reason for Latin America’s poor R&D investment its own companies, and those multinationals active in the region, don’t look to innovate. Of course some of the reasons for the lack of private-sector investment are structural. But companies need help. The technology clusters around California’s top universities, or in Oxford or Cambridge in the UK, show how university expertise can help to drive private sector investment. Latin America’s leaders often say that they want to emulate Singapore and Asia in creating a ‘knowledge economy’. Places like Brazil, Chile, Colombia and Mexico have launched new initiatives to help them do just that. But the success of these plans will depend on their higher education systems.