Knowledge in the Development of Economies

Knowledge in the Development of Economies

Institutional Choices Under Globalisation

New Perspectives on the Modern Corporation series

Edited by Silvia Sacchetti and Roger Sugden

This innovative book offers a critical perspective on the state of the current global economy, making sense of knowledge-related issues by critically assessing existing institutional choices, as well as pointing to new ways forward.

Chapter 5: Higher Education and Economic Development: Do We Face an Intertemporal Trade-off?

James R. Wilson

Subjects: economics and finance, economics of innovation, institutional economics, regional economics, innovation and technology, economics of innovation, urban and regional studies, regional economics


James R. Wilson INTRODUCTION 1. The production of research and learning activities that takes place in universities represents a strategically important area of economic activity; in most economies, higher education (HE) fulfils various key roles in advancing economic development. Most widely recognised are the contributions of the HE sector in providing economies with certain forms of human capital and in uncovering potentially significant research advances. In turn both of these feed into the development of other economic sectors and of society in general. Thus universities are seen as vital components in regional and national systems of innovation, for example. In many countries HE is also increasingly recognised as having significant potential as a generator of economic rents (and export revenues) in its own right. Finally, universities are sometimes acknowledged for their contribution to the development of characteristics such as capacity for critical thought and open-mindedness among the people of a society. Recent years, however, have seen quite dramatic changes in the organisation of the HE sector in many parts of the world; in particular it is argued that a ‘commercialisation’ of universities has been (and is) taking place (Bok, 2003). In this chapter we reflect in particular on experience from the UK in analysing these changes. Given the whole range of potential contributions of HE to an economy, we explore the potential implications of these changes for economic development. We build from the strategic choice approach to economic development (Cowling and Sugden 1998, 1999; Sugden and Wilson, 2002, 2005; Bailey...

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