Go East, junge Mann

Last night I attended a reception at the beautiful residence of the German Ambassador to Singapore to mark the ties between Germany and Singapore in the life sciences. It gave the recent THE world rankings of universities some real world context, in the sense of showing the rise of Asia in some of the new growth sectors and the link to higher education.  One of the speakers was Dr. Andreas Schmidt, the CEO of Ayoxxa, a biotech firm based in Cologne and Singapore that just raised a round of investments to develop and bring to market its chip-based protein analysis technology.  That technology was developed by Dieter Trau, a German bioengineering professor at the National University of Singapore. NUS, which didn’t break the top 50 best schools for the life sciences as recently as two years ago, is now ranked 33^rd in the world.

Other speakers talked about ‘Singapore as the new US’ and ‘the East as the new West’, highlighting, if in a slightly hyperbolic way, the ease of doing business in Asia and the growing talent pool in the region. Singapore and Germany were touted as bridges on their respective continents, given their central location, and thus natural partners to bring these two zones together. 

Is there a new era dawning where Asia represents a new frontier for European entrepreneurship? It’s hard to say.  The Economist’s recent coverage of the difficulty of starting businesses in Europe laments the continent’s lack of entrepreneurs, thus migration elsewhere where the conditions are better makes sense, though Berlin, London and Stockholm are seen as hubs of innovation.  Asian investment in creating leading universities is also an important factor: young scientists are being attracted because the quality of the labs surpasses what they are offered in Europe and North America.

On the other hand, start-ups need capital and there is still a tendency for capital to invest locally. The global slowdown isn’t helping matters with financing being tighter and in the case of Singapore, there is some grumbling that money that could be going in to investing in innovations is instead being plowed into an overheated property market where returns have been high with relatively little perceived risk. Still, as Asia continues its ascent to become a knowledge based economic center and source of innovation, it is good to see European entrepreneurs present.

Shifting Borders of the Global Education Map

The sun is setting on parts of the West

The highly anticipated Times Higher Education global rankings of universities were released last night at 9:00 GMT, with the twittersphere counting down the hours in a slightly overwrought display of nationalist angst.  Though not headline news in the US, the rankings are in much of the world, particularly in Asia, where I now live.

 Higher education is one of the areas where Asia is seen as a rising power, eclipsing the West and certainly, one of the big trends this year’s results confirm is the rapid ascent of the East, especially the fast growing economies.  Asia, including Australia and New Zealand, hold 27 of the top 200 spots but more importantly, institutions there are making great leaps forward. The West? Not so much.

The US still dominates, by a long shot – a third of the top 200 places are US institutions. Also, the UK alone has 31 and those two countries together have a lock on the top 10. But there are sign of faltering.  A leading story at the THE has an interesting graphic showing the average ranking per school per country.  The old order is diminished – it’s not just the US and the UK that are slipping but, tellingly Japan, which is surrounded by far more dynamic countries.

What about Europe? It is not a uniform declinist narrative of institutions slowly slipping below their peers to the east.  Fully a quarter of the top 200 universities are in continental Europe and some countries are showing very strong upward momentum.  The northern half of Europe on the whole in fact is doing fairly well.  The Netherlands is not only the third ranking country in terms of top ranked universities but is the second (after Singapore) most improved in terms of positioning.  Belgium, Germany, Sweden and Denmark are doing well. France, even if the THE’s calculations show the average place to have slipped (likely an artifact of a sharp drop by ENS-Lyon), gained 2 universities in the top 200 for a total of 7 and most French institutions moved up.

But what of course is notable is the absence of Southern Europe. Spain, Italy, Greece and Portugal are absent from the top 200 and the severe budget cuts as a result of the crisis in that region means they are unlikely to recover ground as other parts of the world race ahead. The positioning of the southern European universities is of course not an outcome of the crisis; they suffered from low rankings prior to it. But the global university rankings point to another realm where the north south divide in Europe is real and growing.

Finally, it’s interesting to consider where the BRICs are in all this.  With the exception of China, the developing powerhouses are not very well represented at the top: Russia and India are shut out of the top 200 although Brazil’s sole candidate is moving up. Russia’s showing is particularly miserable, given its history; its top ranked university is behind those of Greece and Spain and despite the legendarily low and stringent admission rates to India’s leading institutions, none makes the cut. More evidence perhaps that we are moving, though perhaps slowly, towards the (East) Asian century.

Turkey 2011: Out of Europe's Shadow

As 2011 draws to a close, we can be certain that it will be remembered as the year of the Eurocrisis, with all the global economic uncertainties that implies.  However, one of the biggest stories of the year with implications for Europe has been somewhat drowned out by the ongoing financial mess. That is the new role of Turkey internationally. 

As Joshua Walker notes in his recent GMF piece, Turkey has been the unambiguous winner of the “Arab Spring” and the “European Fall.” Its role in the Arab Spring in particular has helped strengthen Turkey’s relationship with the US, strained over Israel after the Gaza flotilla incident. Its role as a US ally in the region, seen especially in the cooperation between both countries in pressuring Assad in Syria, has shifted Ankara’s focus toward Washington and away from Brussels.  David Ignatius credits in part the developing friendship between Obama and Erdogan for the productive relationship.

With the rapid growth of the Turkish economy over the past several years (though forecasted to slow in 2012) and its newfound political role in the Middle East, the Turks might be forgiven for thinking that now the EU needs Turkey more than the other way round as Prime Minister Erdogan told Spiegel earlier this year. Indeed, Turkish public opinion towards the desirability of joining the EU has fallen precipitously since 2004, according to the 2011 Transatlantic Trends survey (though it has recovered some ground this year): fewer than half (48%) think it would be a good thing. In a poll of European elites conducted this year, the same minority percentage of members of the European Parliament favored Turkish accession.

Turkey still has some ways to go before Washington considers it a truly reliable partner as Hilary Clinton mentioned in an October speech.  Obstacles include its weak record on democracy and human rights as well as its strained ties with Israel.  But its growing power regionally and economically point to a day when Europe may regret its disregard of its neighbor.

The Berlin Consensus

The finger-wagging Washington Consensus of the 1990s that prescribed market based reforms for crisis-ridden developing countries has been replaced in Europe by what we might call the Berlin Consensus that calls for austerity in the Eurozone countries in crisis. Regardless of the outcome of the Brussels Summit taking place today and tomorrow for the fate of the Euro (and you can vote on what you think the likelihood of the breakup of the currency is at CES’s Facebook page), austerity measures will be the order of the day.

Governments in Ireland, Greece, Spain and Italy are slashing budgets, subsidies and social programs  in order to try to bring deficits in line. The pain this will cause in terms of lower wages, higher unemployment and disrupted lives was made remarkably human by the Italian Welfare Minister, Elsa Fornero, who broke down in tears while announcing the austerity plans.

Yet in the slash and burn environment as countries race against the clock to assure markets that they are serious about getting spending under control, there is the danger that too little in these measure will focus on getting the country growing again or that untargeted cuts will destroy existing foundations for future growth. The Guardian’s analysis of  Monti’s budget in Italy, which cuts €30 billion, suggests that there is little that will stimulate growth.  Broadbrush cuts to higher education in Ireland, especially in science, threaten to undermine the high-tech infrastructure that has been crucial in attracting investment and skilled talent to the country for the past two decades, reports the Irish Times.

The human costs for long-term stagnation are also staggering.  El Pais reported today that Spain, at 31% has the highest percentage of overqualified labor in the EU, that is, people with university degrees who are employed in jobs that don’t require one. Ireland is second with 29%.  This inevitably leads to brain drain – indeed, highly skilled workers in the Iberian peninsula have been fleeing to emerging markets in their former colonies in Latin America and Africa where salaries and prospects are better. With youth unemployment rates near 50% in Spain and Greece and over 30% in Ireland, Italy and Portugal, the likelihood that these countries lose their best talent pool or that a lost generation is never really able to make up for the lost wages and experience (see the NBER paper on the long-term effects of graduating in a recession) is high. 
 

Without a better consensus on what kinds of austerity measures are necessary and what kinds of policies will set the stage for increased productivity and employment in the countries currently in crisis the Euro project is not viable.  All kinds of austerity plans will inevitably be painful but the point is not pain in and of itself; they need to be ones that decrease the imbalances in competitiveness of the northern and southern economies.  Otherwise, the Berlin Consensus, like the Washington Consensus that came before it, is doomed to fail.

Making a List, Checking it Twice

Perhaps you overslept the 4:00 am sales on Black Friday or your friends and family do not understand the thrill of a waffle iron. To help you with the yearly chore of finding the perfect present, here are some books on Europe published this year that you might want to add to your holiday gift list.

Aerotropolis: The Way We’ll Live Next by John D. Kasarda and Greg Lindsay. Not strictly or even mostly a book about Europe, this book describes the airport city as an important engine of economic growth in the 21^st Century. Though Schiphol in the Netherlands is a early model of this kind of city, the book describes yet another way Europe may be overtaken by Asia. Whether we’d actually want to live in these potentially dystopic hubs is another question.

Boomerang: Travels in the New Third World by Michael Lewis. This is perfect for anyone on your list who wants to understand the insanity that led to the sovereign debt crisis and be entertained at the same time.

The Family Meal: Home Cooking with Ferran Adria by Ferran Adria. Ok, this is not technically a book about Europe but it offers a way to bring some of the ideas of the most influential chef of the last decade, Spain’s Ferran Adria, to your kitchen.  While these recipes are not the fantastically hallucinatory creations he developed for El Bulli, the upside is you don’t need a particle accelerator to make them.

Liberty’s Exiles by Maya Jasanoff. In a season of revolutions across the globe, we are accustomed to seeing the fate of the winners and losers play out on CNN. This study rescues the story of an earlier group of those on the wrong side of history: the loyalists of the American Revolution and their diaspora throughout the British Empire.

Linguistic Justice for Europe and for the World by Philippe van Parijs. Just as a common currency in Europe reduced transactions costs and made the flow of goods easier, a lingua franca would reduce the costs of cross-border communication and facilitate understanding.  At the same time, it would create injustices and this leading political philosopher lays out some ways in which those might be mitigated.

Nomad by Ayaan Hirsi Ali.  The unrelenting criticism of Islam will grate on some but it’s beautifully written and the description of a tolerant, multicultural Holland that we now see slipping away is compelling.  Also, her discussion of money, particularly the extension of credit to immigrants, is an element of the credit crisis rarely viewed.