British Universities Need to Invest to Be the Best

05/25/2010 03:15 pm ET | Updated May 25, 2011

Last week, a cry of fear went up from some of Britain's best universities. Oxford and Cambridge Universities both asked to be allowed to charge more for their courses, and the Russell Group (the representatives of the top 20 universities in the country), called for the cap on fees to be abolished.

The student unions have long called for an end to student fees (they want students to pay for university with a graduate tax), so why are the universities pulling in the opposite direction? They are, I think, worried about losing their world status.

And if you look at world trends, they are right to worry. The universities which top the various leagues of the best places to study in the world tend to be American. Only two of the universities in Shanghai Jiao Tong University's ranking of world top 20 are in Europe. The story is the same for Nobel Prizes. In the last fifty years more Americans have won the Nobel Prize than the rest of the world combined. Are they more brilliant? Of course not. So why? What makes good universities good?

Of course, it's good facilities, good teachers, good research academics, and good organization. But in the long term, what makes universities good is having enough money to pay for better facilities, better teachers and research academics, and better administrators. What the Nobel prize tally and the Harvard World Fellows show is that America has most of the top universities in the world because they believe in investing in higher education. Yale knows that in the long run it needs to attract emerging global leaders and have them affiliated with Yale from an early stage to bear fruits later.

There's a direct relationship between investment in higher education and results. Measured at equal purchasing power, Americans spend over double what Europeans spend on higher education. Americans devote $22,476 to higher education, Europeans only $10,191. Americans also spend more of their GDP on higher education than Europeans do: nearly 3% of GDP, compared to Europe's measly 1.3%. The correlation is simple. If you believe, as I do, that a good higher education is essential not only to a country's long-term economic health, but also to its ability to compete in the global knowledge economy, and prowess in science and arts, then you will surely agree that when it comes to higher education, you get what you pay for. And we are not getting enough.

The hard question, of course, is where the money comes from. For too long, Britons have believed that the money should only come from the poor put-upon taxpayer. As should be painfully clear now, that is insufficient. As is starting to happen, universities need to diversify their sources of income to provide the investment that turns an adequate university into a great one. That means making greater use of alumni contacts, and aggressively looking for private philanthropy and endowments.

We must seize the twenty-first century -- the competition has started from countries which understand this. Saudi Arabia has just opened a state-of-the-art new university on the eastern shore of the Red Sea, costing billions of dollars, and both Dubai and Qatar are opening campuses of top American universities in the Gulf. The message is clear: Britain will be left behind unless we start investing in higher education.

In the twentieth century, America has punched above its weight in terms of global population when it comes to Nobel Prizes and academic excellence. There is no secret as to why: higher investment from many sources. There is no reason why Britain should not do the same in the twenty-first century.

Azeem Ibrahim is a Research Scholar at the Kennedy School of Government at Harvard University, Member of the Board of Directors at the Institute of Social Policy and Understanding and Chairman and CEO of Ibrahim Associates.