AS JAMIL SALMI leaves the stage at a Times Higher Education conference in Qatar, he is mobbed by people pressing their cards on him. As a former co-ordinator of the World Bank’s tertiary-education programme and author of a book entitled “The Challenge of Establishing World-Class Universities”, he is the white-haired sage of the world-class university contest. And he is greatly in demand, for the competition to climb the international rankings has become intense.

Higher education in America has long been a strongly competitive business. Students and university presidents alike keenly watch the rankings produced by the US News and World Report. Such rankings encourage stratification. One of the metrics is the proportion of students a university turns away, which encourages selectivity. That in turn encourages differentiation between better and worse universities. The American model is thus quite different from the continental European one, which (aside from France’s grandes écoles) is a lot less selective and more homogeneous.

Now competition and stratification are spreading. According to Ellen Hazelkorn, author of “Rankings and the Reshaping of Higher Education”, there are around 150 national rankings around the world. But thanks to globalisation and the growth in international student flows, attention has shifted from national to international rankings.

Governments want top-class universities because the modern economy is driven by human capital.

The goal is to nurture people who will create intellectual property and clusters of high-tech companies similar to those around Stanford and Cambridge. A great research university is not a sufficient condition for creating such a cluster, says Jean-Lou Chameau, former president of Caltech and now president of Saudi Arabia’s King Abdullah University of Science and Technology (KAUST); but “you can’t do it without having more than one great university around.”

Increasing reliance on tuition fees is another reason for more competition. Students “want to be sure that they have got a big global brand on their certificate that’s going to be a passport to their future”, says Phil Baty, editor-at-large of Times Higher Education. America’s state universities, he says, used to show little interest in the international market. Now that their budgets have been cut, he sees a lot more of their presidents.

The qualities that matter
 
Nian Cai Liu of Shanghai Jiao Tong University started the international race in 2003. “My university was one of the first that the government picked to become a world-class university. I decided to benchmark us against those in the West,” he says. He came up with six indicators of research excellence, used them to rank the world’s top universities and published the result. It caused uproar in countries that did badly—particularly Germany, birthplace of the research university. Times Higher Education and another company, QS, followed with their own rankings. Shanghai focuses purely on research; THE and QS also look at things like staff-student ratios and reputation.

American institutions take the top slots in the Shanghai rankings (see chart 3), with Britain as the runner-up. Private universities dominate, though some state universities (such as California’s) are also excellent. But in relation to their population size, the Nordic countries, Switzerland and the Netherlands do best, and there is movement in the rankings. Emerging markets are on the rise; America’s state universities and Britain’s second tier are slipping.
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The rankings matter because of their impact not just on the amour propre of politicians and university presidents, but also on how universities are run. “Rankings force institutions and governments to question their standards. They are a driver of behaviour and of change,” says Professor Hazelkorn.

One way of improving your rankings is to set up a top-class research outfit from scratch and hire a former head of Caltech to run it, as Saudi Arabia has done with KAUST. But not many countries can afford the $20 billion endowment that KAUST is said to have received from the late King Abdullah.

An alternative luxury model is to get a top-class foreign university to set up on your soil. The United Arab Emirates has got NYU, which has also set up a campus in Shanghai, while Yale has a partnership with the National University of Singapore.

Qatar is doing something different again. Education City is a collection of eight foreign universities in grand new buildings on the outskirts of Doha, each of which teaches a subject the government considers useful to the country. Texas A&M does engineering (for the gas industry); Northwestern does journalism (for Al Jazeera, Qatar’s news outfit); Georgetown does foreign studies (for Qatar’s regional foreign policy); and so on. Nazarbayev University in Kazakhstan and Songdo University in Incheon, South Korea, have adopted the same model.

Competition has intensified not just for excellent academics but also for excellent students
Most countries, though, work with the universities they have got and try to improve the quality of their top institutions. China has a project called “985”, launched in May 1998, to which the Shanghai rankings were a response. Germany launched its Exzellenzinitiative in 2005. In 2011 Nicolas Sarkozy, then France’s president, announced a programme to create a “Sorbonne league’’—clusters of universities and organisations affiliated to its Centre National de la Recherche Scientifique—to compete with America’s Ivy League. Russia has started a project called “5-100” to get five universities into the Times Higher Education top 100. Japan, under its Super Global Universities Programme, will give selected universities extra funds, with the bulk going to 13 research universities. Britain has tweaked its system to hand more research money to the top tier and less to the middle-rankers (the bottom layer never got any anyway).

Excellent universities need excellent faculty, so competition for them has increased. Among the big markets, Australia, America and Canada universities are (on average) the best payers, but some of the new Gulf employers offer twice as much.

Pay for the best is rising in China, too. The country’s universities were destroyed during the Cultural Revolution. As part of Deng Xiaoping’s modernisation programme, Chinese students were sent abroad to study, and many did not return. In 2008 the country launched a programme, “Thousand Talents”, to entice more of them back. Scholars get a 1m yuan ($160,000) “resettlement grant”, and universities use research funds from the government and industry to raise salaries. One of its successes is Shi Yigong, a former Princeton professor who is now professor of life sciences at Tsinghua University. He has (somewhat) narrowed the gap between salaries in his department and those in Western universities. When he returned in 2008, a full professor earned around 100,000 yuan ($14,400) a year; now the figure is more like 300,000-500,000 ($50,000-80,000) a year. Professor Shi is particularly proud of having recruited a scientist who had a job offer from Cambridge, though he says that he still has difficulty attracting talented young scientists with faculty positions from Harvard, Stanford or Princeton.

Competition has intensified not just for excellent academics but also for excellent students. Singapore’s “global schoolhouse” strategy, launched in 2002, set a target of attracting 150,000 students by 2015. International students pay more than locals, but the scheme was not designed to make money out of them. Singaporean talent scouts roam the region, generous scholarships are offered to the brightest, and tuition fees are cut for those who stay to work when they have finished their degrees—in sharp contrast to Britain, which chucks out most international students the moment they have graduated. The idea, according to Lee Hsien Loong, Singapore’s prime minister, was to “attract talent from all over the world to add sparkle to our diamond”.

Germany, too, is keen to welcome foreign students. Again, this is not to make money, since the universities do not charge tuition fees. Chinese students are prominent, as they are everywhere else. “Our demographics mean we are in need of foreign talent,” says Georg Krücken, director of the international centre for higher-education research at Kassel university. “These students are nodes in a global network of talent.”

There are plenty of worries about the effects of rankings. Bahram Bekhradnia, president of Britain’s Higher Education Policy Institute, reckons that “they’re worse than useless. They’re positively dangerous. I’ve heard presidents say this all over the world: I’ll do anything to increase my ranking, and nothing to harm it.” That is hardly surprising, since universities’ boards commonly use rankings as a performance indicator for determining presidents’ bonuses.

One concern is that these metrics measure inputs rather than outputs. “The indicators are resource-intensive. They’re about wealth,” says Professor Hazelkorn. Some are also unreliable.

A staff-student ratio is easily manipulated and says nothing about the quality of the teaching.

But the main objection is that most of the metrics, directly or indirectly, concern research. There are no good internationally comparable measures of teaching quality. So one of Mr Salmi’s favourite universities, the Franklin W. Olin College of Engineering in Massachusetts, which he says “provides a superb learning experience to its students”, does not feature in international rankings because it does no research.

Justin Lin, a former chief economist at the World Bank and currently director of the China Centre for Economic Research at Peking University, has a habit of swimming against the tide.

In 1979 he defected from the Taiwanese army to China, swimming across the narrow strait from Taiwanese-administered Kinmen to the mainland. These days his contrarian nature has tamer outlets: he doubts that China should be in the race to create world-class universities if the concept is defined by the number of its faculty’s publications in journals dominated by the West’s research agenda. “Who cares about world-class research if it doesn’t apply to the conditions that you are in?” he asks.

The tallest poppies
 
Higher salaries for academics returning home are causing rancour. When Professor Shi circulated a proposal for offering generous salaries and ample research funds to top-flight scientists from abroad, he was criticised. “Some people said that they contributed to China’s past development while these recent returnees stayed away in the West, but now these guys want luxury.” In Singapore the shortage of places for locals has caused anger. Incentives for clever foreign students have been cut back.

In Germany the idea of promoting a few universities above the rest has met with resistance. “The myth of the German university is that all universities are equal. There has been a lot of criticism of [the excellence initiative],” says Professor Krücken. The government has responded by setting up a new initiative, focused on teaching, not research, and covering more universities.

Europeans, cross that they did so badly in rankings designed by the Chinese and the Anglo-Saxons, have started their own systems. France’s Ecole des Mines has produced the “Professional Ranking of World Universities”—the number of graduates from an institution who are running Fortune 500 companies—in which the French do nearly as well as the Americans and better than the British. The European Union has created the U-Multirank, a ratings system which gives different answers depending on the search criteria, to get away from the zero-sum competition of rankings. There is a virtue in that: a single indicator is rarely a good measure of quality.

But since the U-Multirank offers students little information on British or American universities, it is of limited use to those with global horizons. Anyway, politicians and university presidents, like the rest of humanity, are competitive creatures: nothing will stop them measuring themselves against each other. The main constraint on the race is not aversion to competition but the scarcity of funds. That is one reason why higher education is, increasingly, turning to the private sector for money.