In a global economy that depends on sophisticated innovation and knowledge to drive growth and wealth, a new World Bank report on higher education suggests that low- and middle-income countries should resist the temptation to establish world-class universities to cash in on research earnings and court global prestige before educating their own citizens to high tertiary standards. According to the new report, The Road to Academic Excellence: The Making of World-Class Research Universities, which charts the experience of 11 leading public and private research universities in nine countries from Africa, Asia, Latin America, and Eastern Europe, elite research universities are outpacing the smartest companies in the world with their original research. In one recent global study on new patents, for example, leading universities and research institutions are driving more scientific strides in biotechnology than private companies and firms. Looking at the elite research and grant money cascading out of world-class universities, as well as their new thinking in the humanities and social sciences, you can certainly understand why countries might think that a top-flight research institution is all that stands in their way of reducing poverty, leaping forward in their national development, and establishing new footholds in the global knowledge economy, says Dr. Jamil Salmi, the Bank s Higher Education Coordinator, and a co-author of the new report. But this decision cannot be simply tactical. It must be a long-term strategic decision that aspiring countries take, weighing all the facts, while banishing any notion of fast results. The new report concludes that top-performers in the research university world share three common characteristics, without which 21st Century universities cannot survive, let alone, excel: a high concentration of talented academics and students, significant budgets, and strategic vision and leadership. In most cases, world-class universities have students and faculty who are not exclusively from the country where the university operates. This enables them to attract the most talented people, no matter where they come from, and open themselves to new ideas and approaches. Unquestionably, the world s best universities enroll and employ large numbers of foreign students and faculty in their search for the most talented. In this respect, the fact that world-class universities succeed in mobilizing a broadly diverse national and international academic staff is likely to maximize these research institutions knowledge-networking capacity. It Costs Millions Another conclusion from the new Bank study is that building and operating world-class universities can cost millions of dollars. For example, the authors show that in late 2007, Saudi Arabia announced plans for a new $10 billion graduate research university; Pakistan plans to spend $750 million for each of its new universities of engineering, science, and technology during the next few years; and the school of medicine established by Cornell University in Qatar in 2002 cost $750 million. The availability of abundant money and international prestige creates a virtuous circle that allows elite universities to attract more top professors and researchers, as is often the case for leading U.S. colleges. Recent years of global economic crisis, though, have significantly affected research universities, potentially boosting East Asia s universities. East Asian countries have weathered the economic storm better than their Western counterparts, as they seek to join the top ranks of the global research elite. For example, India has increased its higher education investment by 31 percent since 2010, and China has continued to fund its excellence programs in support of the nation s leading universities. Vision and Leadership Matter Although unlimited money and attracting the world s best and brightest students and teachers helps strengthen a country s bid to create a world-class university, strategic vision and leadership are also vital, without which national aspiration to a world-class university ranking falls short. According to the new report, world class universities thrive in environments that foster competitiveness, unrestrained scientific inquiry and academic freedom, critical thinking, innovation, and creativity. Moreover, institutions that have complete autonomy are also more flexible because they are not bound by cumbersome bureaucracies and externally imposed standards, even in light of the legitimate rules and statutes that bind them. As a result, they can manage their resources with agility and quickly respond to the demands of a rapidly changing global market. To make the grade, you also need inspiring and persistent leaders, a strong strategic vision of where the institution is going, a philosophy of success and excellence, and a culture of constant reflection, organizational learning, and change. On top of that, you can t be impatient, either, says Professor Philip G. Altbach, Director of the Center for International Higher Education at Boston College, and a co-author of the new Bank report. The report says that not every country needs comprehensive world-class universities, at least not while more fundamental tertiary education needs are not being met. Many countries, it adds, would be better off initially focusing on developing the best national universities possible. For example, higher-level research institutions in Sub-Saharan Africa that are equipped to provide quality education and conduct relevant applied research can play a key role in training skilled workers to be fluent in the latest technologies and apply them in industries to make a broader range of products that win customers worldwide. Good-quality tertiary education is also key to stimulating innovation, from producing new varieties of crops and sources of energy that can speed progress toward reducing poverty, achieving food security, fighting disease, improving health, and creating new jobs, says Ghana s Education Minister, the Honorable Betty Mould-Iddrisu. In the foreword to the new report, India s Minister of Human Resource Development, Dr. Kapil Sibal, writes that the ultimate test of modern research universities is whether they can be flexible enough to encourage learning across disciplines and to harmonize education with the needs of society. Innovation, he writes, is seen as the mantra for development, a realization so pervasive that nations are scrambling to create institutions and organizations that would facilitate the process of knowledge creation. The world today is ripe for another tectonic shift in our understanding of the university as an institution. India can emerge as a knowledge power only if an appropriate architecture for higher education is put in place. Indian youth have demonstrated their inventiveness and energy in the past. Higher education that channels this capacity for innovation will unleash the latent potential of India s demographic dividend. The World Bank and Education By investing in people, the World Bank believes that education is a powerful driver of human development and economic growth, and is also one of the strongest instruments for reducing poverty. The Bank manages a portfolio of $11.2 billion with operations in 82 countries, and invested more than $1.8 billion in education in 2011. During the last ten years, education financing by the International Development Association, the Bank s zero-interest fund for the poorest countries, has helped recruit or train 3 million additional teachers and build more than 2 million new classrooms, benefiting more than 100 million children every year. Cutting Through the Hype around World-Class Universities In today s global economy where money and ideas change hands at dizzying speed and generating sophisticated innovation and knowledge are the new sources of growth and wealth, it can be tempting for many countries to stake a claim to this new club by establishing world-class universities from scratch. After all, elite research universities are now outpacing the smartest companies in the world with their original research. A recent global study of patents shows for example that universities and research institutions are now driving more scientific strides in biotechnology than private companies and firms. Add to this the fact that the new world-class universities, whether in the United States, India, Hong Kong, South Korea or Chile, also serve as contagious hubs for new thinking in the humanities and social sciences. For these reasons and more, it would be tempting for poor and middle-income countries to think that a top-flight research institution is all that stands in their way of reducing poverty, leaping forward in their national development, and establishing profitable new footholds in the global knowledge economy. But this decision though cannot be simply tactical. It must be a long-term strategic decision that aspiring countries take, weighing all the facts, while banishing any notion of fast results. A new World Bank study that charts the experience of 11 leading public and private research universities in 9 countries from Africa, Asia, Latin America, and Eastern Europe, concludes that top-performers in this rarified world share common characteristics, without which 21st Century universities cannot hope to survive, let alone, excel. Three factors distinguish elite international universities from their competitors, namely: a high concentration of talented academics and students; significant budgets; and strategic vision and leadership. In most cases, world-class universities have students and faculty who are not exclusively from the country where the university operates. This enables them to attract the most talented people, no matter where they come from, and open themselves to new ideas and approaches. Unquestionably, the world s best universities enroll and employ large numbers of foreign students and faculty in their search for the most talented. In this respect, the fact that world-class universities succeed in mobilizing a broadly diverse national and international academic staff is likely to maximize these institutions knowledge-networking capacity. Another take-away conclusion from the new World Bank study is that building and operating world-class universities can cost millions of dollars. For example, the authors show that in late 2007, Saudi Arabia announced plans for a new $ US 10 billion graduate research university; Pakistan plans to spend US$ 750 million for each of its new Universities of Engineering, Science, and Technology it will build over the next few years; and The School of Medicine established by Cornell University in Qatar in 2002 cost US$ 750 million. World class universities have four main sources of financing: government budget funding for operational expenditures and research, contract research from public organizations and private firms, the financial returns generated by endowments and gifts, and tuition fees. The availability then of abundant money and international prestige creates a virtuous circle that allows elite universities to attract even more top professors and researchers, as is often the case among the leading US colleges. Recent years of global economic crisis though have had a significant effect on research universities, with the overall result potentially be a boost to East Asia s universities. East Asian countries have weathered the economic storm in better shape than their Western counterparts, and they seek to join the top ranks of the global research elite. For example, India has increased its higher education investment by 31 percent since 2010, and China has continued to fund its excellence programs in support of the nation s leading universities. Lastly, while unlimited money and attracting the world s best and brightest students and teachers certainly helps strengthen a country s bid to create a world-class university, there s one more vital ingredient to consider, without which a coveted national aspiration to own a global brand in higher education falls apart strategic vision and leadership. From looking at case studies across many regions, it is clear that world class universities thrive in an environment that fosters competitiveness, unrestrained scientific inquiry and academic freedom, critical thinking, innovation, and creativity. Moreover, institutions that have complete autonomy are also more flexible because they are not bound by cumbersome bureaucracies and externally imposed standards, even in light of the legitimate accountability mechanisms that do bind them. As a result, they can manage their resources with agility and quickly respond to the demands of a rapidly changing global market. But, even this level of autonomy is not enough to establish a world-class university, without other vital strategic leadership and governance features. To make the grade, you also need inspiring and persistent leaders, a strong strategic vision of where the institution is going, a philosophy of success and excellence, and a culture of constant reflection, organizational learning, and change. On top of that, you can t be in a hurry either. So is this just a way of telling low and middle-income countries to lower their sights, let others aim high, and accept this existing monopoly in world-class universities? No. But the reality of the matter is that not every nation needs comprehensive world-class universities, at least not while more fundamental tertiary education needs are not being met. Many countries would be better off if they focused initially on developing the best national universities possible. Higher-level institutions in Sub-Saharan Africa that are equipped to provide quality education and conduct relevant applied research can play a key role in training skilled workers to be fluent in the latest technologies and apply them in industries to make a broader range of products that win ready customers worldwide. Good-quality tertiary education is also key to stimulating innovation, from producing new varieties of crops and sources of energy that can speed progress toward reducing poverty, achieving food security, fighting disease in all its dread forms, and improving health. Such institutions can emphasize the diverse learning and training needs of the domestic student population and economy. By concentrating efforts on the local community and economy, these institutions can lead to more effective and sustainable development than broader world-class aspirations. The challenge then for national governments is not to chase the dream of building world-class universities for the sake of global prestige and the rich research proceeds that they bring. We urge them instead to see through the hype and focus on what really matters. In this time of renewed uncertainty in global markets, when long-established foreign aid donors are looking for fiscal in all quarters, and emerging markets look to solidify their rising growth rates, we must focus relentlessly on the quality of higher education and research, which continue to beckon as the ultimate pathway to people s empowerment and the lasting development of nations worldwide. The Hon. Betty Mould-Iddrisu is Ghana s Minister of Education; The Hon. Shamsh Kassim-Lakha is Founding President and Trustee of the Aga Khan University, and former Pakistani Minister of Higher Education; Dr. Jamil Salmi, an education economist, is the World Bank s tertiary education coordinator, and co-author of the new World Bank report The Road to Academic Excellence: The Making of World Class Universities; Dr. Philip G. Altbach is a Professor and Director of the Center for International Higher Education at Boston College, and also a co-author of the new report, which is available