The last decade has witnessed the emer-gence of two distinct dynamic continents, as measured by their impressive economic growth: Asia and Latin America. However, it seems that the rate of modernization and global insertion of Latin American (LATAM) universities have lagged with respect to their Asian counterparts in spite of the definitive potential. The 2012 QS Worldwide Rankings, an annual global ranking of universities, provide a crude but interesting picture. ¹

A Dynamic Continent but a Lagging Higher Education Performance?

While very well-represented in terms of their relative populations (16 LATAM institutions are ranked amongst the top 500, compared to 97 Asian; the ratio is 6.5 to 1 in population terms in favor of the Asian continent), only 2 LATAM universities are ranked among the top 250. And the best positioned LATAM private higher education institution stands at number 251.

A quick intra-regional analysis shows that Brazil comes in strong dominance with 65 universities ranked among the top 250 in the region. But considering only the top ten, Chile stands with 4, Brazil with 3, Mexico 2 and Colombia 1. Brazil’s case is particularly interesting, considering that university enrollment in the country has tripled over the last decade. Brazil excels in two indicators: (1) research papers per faculty member (where it secured 9 out of the 10 top slots), and (2) percentage of faculty holding a PhD. Another key player is Mexico. In terms of overall regional academic reputation and employability, Mexico ranks in the first place. Argentina, Ecuador, and Venezuela are struggling with high student/faculty ratios and academic reputation indicators that are not comparable with the countries represented among the top ten.

The LATAM system is heterogeneous and complex, due to very differing population sizes and demographics, varying land areas, different institutional histories (for example, Brazil did not have universities until the 1930’s, while most Hispanic countries did), the issues they had to address, levels of enrollment, scale, specific political contexts, and subsystems in which they operate (public vs. private).

In spite of this intra-regional heterogeneous performance, all LATAM higher education institutions face a similar challenge: how to develop a critical mass of highly skilled human capital.

The task of excellence in this market should not be a pending assignment; Latin America’s modernization and integration into the global knowledge economy depends on it. Public funding for universities, which has been historically low and was reduced even further with the global economic downturn,²  will not suffice to generate a competitive and inclusive higher education landscape. Intellectual commitment, technocratic know-how and funding will become a major civil society task to assure a sustainable evolution of LATAM higher education institutions. Why this is so?

Some Characteristics of the LATAM Higher Education Landscape

Two interrelated structural factors call for an urgent civil society involvement: demographics and competing fiscal needs. Urgency is not only related to competitiveness but also to the demographic pressures of a very young population structure (higher education enrollment in Brazil grew from 7.8% in 1997 to 24.7% in 2009). Most governments provide sufficient funding to primary and secondary schools, on balance, in inclusive democratic societies. A growing population exerts fiscal pressures both at the downstream and upstream of the overall integrated education system.

Equity and social mobility puts a first priority to adequately fund basic education; at the same time the LATAM region needs a dynamic upper education echelon that can absorb the unabated growing enrollment while not diluting the quality of the existing institutions. Today, in Chile and Colombia, nearly 50 percent of higher education enrollment is at private institutions. And it is estimated that three-fourths of the enrollment growth in the last 25 years has been absorbed by private initiatives.

Since mass higher education is a worldwide reality, what are the drivers to insure a critical mass of competitive LATAM institutions?

The Strategic Possibilities of  International Networking

The reality here is that the experiences of international networking of LATAM universities are rich at the individual institutional level but there are many more strategic opportunities to be explored and developed at the systemic level.

The principal scheme to interact on a bilateral basis has been based on the exchange of students and, less frequently, exchange of faculty, dialogue among administrators or joint venture academic programs. But there is no intra-regional network system of exchanges like the Erasmus Programme (the European Union student exchange program for intra-European exchange³), though some LATAM institutions participate in the Erasmus Mundus program.

The drivers to sign international agreements are varied. In the case of LATAM-Europe, the motivation is demographic: European institutions need to attract students to compensate for static or declining population growth. Another QS Intelligence Unit survey demonstrates that, as a region, Europe counts in first place in terms of agreements with LATAM universities, followed by North America.⁴   On an individual country level, the United States is at the top. Not surprisingly, given the common language, Spain comes in second, followed by Germany and France. In terms of scope and focus the figures are quite heterogeneous: some agreements privilege regional scale but others are built on regional diversity. In short, the presence of foreign students in LATAM institutions is very low: the majority are from within the region itself. This compares to 19 percent visiting East Asia and the Pacific.

Again, with the United States and Canada, the main drivers are academic knowledge and reputation and to secure a niche for top students to pursue Ph.D. studies (65 percent of LATAM candidates choose North America). Here, the main target was the internationalization of academic curricula. In addition, institutions need to overcome the low level of proficiency in foreign languages and offer courses in English.

While institutional agreements between LATAM and Asia and Africa are essentially nonexistent at present, there are opportunities for Latin American institutions to pioneer the domain of relations with these other continents, which also provide impressive opportunities for trade and investment relationships.

Another weak link in the performance of LATAM has been the lack of a fluid cooperation between business and academia, which is in part a reflection of a rigid philosophical concept of the university as one that should be properly insulated from the pecuniary characteristics of the corporate world.

To position themselves into the global economy, LATAM institutions should be campus-based, but need to become much more internationally oriented. In particular, top-notch elite institutions should become international and cosmopolitan in terms of their student and faculty bodies. Networks will have to move beyond the traditional Memorandum of Understanding model to become scholarly consortia and institutional joint ventures.

The Harvard Business School has opened small branches in such disparate cities as Singapore, Buenos Aires and Delhi to conduct their business case studies and occasionally impart high-level executive business courses for the local community.

What is the lesson for LATAM institutions of this strategic thinking?  The scarcity in the region is not a restriction on the quantity of land or number of students; rather, it is governance, funding and relevant knowledge. To overcome this, institutions need to engineer joint ventures at the extra- and intra-regional dimensions. Such agreements are more complex than the usual simple bilateral and one-dimensional agreements. As a result, a vision—supported by a modern, flexible and cosmopolitan governance and funding base—is required.

International Funding, Governance and Sponsorship

In these domains, international networking has been—with some honorable exceptions—very weak. Until recently, higher education governance in state-funded LATAM institutions was extremely bureaucratic and politicized. This trend is happily changing, giving institutions more autonomy in their governance, but problems of agency still appear insurmountable in the mega state institutions. Tripartite governance that represents the interests of faculty, students and staff has proven slow to react to the speed of change of the globalized world.

More recently, the role of the state, the importance of internal and external markets, and the social forces and ideologies of autonomy have allowed the political predominance of a core of faculty that clearly is conveying the idea of the university as a conveyor of academic excellence above other competing goals, such as the desire to expand education opportunities to the highest number of students.

Universities in Argentina, Brazil, Chile and Mexico have been active in creating independent technology transfer offices for industry-university synergies, but their performance and gravitas are far below the marvels experienced by this approach in the United States, Europe and Asia. Yet the primary external driver of internationalization in the region is demand by industry and business, not by government public policy interventions. This contrasts with other experiences, in particular in Asia.

How realistic is the internationalization in the strategic and finance dimensions of LATAM institutions?  The answer is that the potential is immense for an a priori paradoxical reason: The intellectual, scholarship and entrepreneurial diaspora of Latin Americans worldwide is of high caliber.

LATAM institutions need to add the brain, human power and finance capabilities of these cosmopolitan citizens to engage in a systemic change. For example, at the level of board of trustees and fundraising mechanisms, most institutions are mainly domestically oriented. International members should serve as trustees in private universities.

In terms of funding, the history of LATAM research centers becoming research universities is worth mentioning. It has been such American foundations as Ford, MacArthur and Hewlett, and such bilateral and multilateral agencies as USAID, the Inter-American Development Bank and the World Bank, that have been at the center of providing seed money to foster institutional change. But in recent years, this funding has primarily been dedicated to specific activities rather than serving as core funding to launch new, fresh initiatives.

Indigenous philanthropic efforts have been uneven: Confessional undertakings have had more quantitative success than non-denominational private higher education institutions.⁶ There is a passive attitude in the majority of potential donors, due to the traditional belief that the model of tuition-free state universities will deliver the required level of education, outreach and socially inclusive mechanisms that the society needs.

In the past, despite a chronic lack of funding by private initiatives, the challenge was surmountable. Although private funding has increased, it must expand further to keep pace with demographic pressures and a growing demand for higher education.

The LATAM region needs a major scale effort to design good governance models coupled with cosmopolitan boards and outreach to the bright Latin American individuals living outside the region to engage them in the governance and funding of universities.

Academic partnerships should also become intra-regional; while data about these is scanty the evidence suggests that they are still relatively insignificant. This is an indicator of a lack of an intra-regional network capability and an underestimation of how intra-regional linkages could consolidate reputation and capabilities at the individual institutional level.

Systematic planning for international matching funds schemes and sponsorship with professional counseling to institutions or agencies has not been undertaken by most administrators and leaders because the perception is that it diverts resources and time with an uncertain or long-run eventual pay-off.

Finally, long-range strategic planning to foster institutional building is not embedded in the culture of the region. The effort to secure a global citizen that can understand and act in a globalized environment is a long-term enterprise. This is a particularly daunting challenge in societies which tend to seek immediate returns.

But the choice is clear: If civil society in LATAM countries does not enter the game decisively, universities will not be able to maintain the pace of change required to sustain the promising rates of economic growth that have lately characterized the region, nor will they be able to accomplish the international and regional integration that opens minds, wills and markets.

Gerardo della Paolera is Professor Luis Maria Otero Monsegur of Economics at Universidad de San Andres, Buenos Aires, Argentina. He was previously President of the Global Development Network; President of the American University of Paris; and Founding President and Rector of Universidad Torcuato Di Tella (UTDT) in Buenos Aires.