Tuesday, July 21, 2009

The Impact of Globalization on Malaysia's Private Higher Education Sector


Much as been said about globalization, which is synonymous with the opening of national borders to the international flow of goods, services, raw materials and resources, information and technology, and human resources.

In the area of higher education, universities have become factors of the competitive advantage of nations (Porter, 1998). They are the locus of scientific discoveries that move economies forward, and the primary means of educating and generating the talent or human capital required in order to obtain and sustain competitive advantage in various industries.

In response to the same forces that have propelled world economies, universities have become more self-consciously global, especially universities of the advanced nations – seeking students from around the world who represent the entire spectrum of cultures and values, sending their own students abroad in educational exchange programmes to prepare them for global careers, offering courses of study that address the challenges of an interconnected world and collaborative research programs to advance science for the benefit of all mankind.

Of the forces shaping higher education none is more sweeping than the people movement across borders. Prospective students travel from one developed nation to another, and from developing or less-developed to the developed countries to seek good education.

However, cross border movements in higher education is not limited to students. Universities have also undertaken the setting up of branch campuses in suitable foreign countries, such as:

The British Open University http://www.open.ac.uk/ alone has 43 branch campuses outside the UK. In Malaysia, the Open University Malaysia http://www.oum.edu.my/portal/ has an enrollment of over 79,000 local and foreign students. It operates in Yemen, Bahrain, and Maldives via partnerships with the local higher educational institutions. By September 2009, it will operate in Vietnam and Ghana (OUM to spread, 2009). INTI University College http://www.newinti.edu.my/ has a branch campus in China focusing on teaching English language to Chinese students to equip them with the global communication language (Ramli, 2006). Limkokwing University of Creative Technology http://www.limkokwing.net/malaysia/ has campuses in Indonesia (Bali), Botswana, Cambodia, Lesotho, and the UK (London).

Where branch campuses are not possible, twinning and transfer programmes with local private institutions of higher education have become another avenue brought about by globalization, for e.g. in Malaysia, the University of Northumbria, UK and KDU College; University of East London, UK and UCSI University College; University of Southern Queensland, Australia and SEGI University College, and the University of London, UK, external degree programmes with several local private colleges (Uda Nagu, 2006a).

Rapid advancements in digital and Internet technology, and e-learning courseware have also significantly contributed to cross border delivery of higher education, for e.g., University of Phoenix, USA http://www.phoenix.edu/ is recognized as the leading accredited online degree course provider. Universitas 21 Global http://www.u21global.edu.sg/Education/home formed by 19 world-class universities, is the leading accredited online MBA course provider. Technology has made access to quality education easier irrespective of nationality and location. While the impact of globalization appears to deliver overall positive effects to higher education, what are the issues and challenges?

Literature Review

Today’s era is characterized by globalization that is changing, among others, the economic environment that in turn affects institutions of higher education irrespective of their physical locations, traditions, and current practices and aspirations. Continuous growth in economic relationships among nations, a global shift towards free-market dynamics, and increasing consumerism are some factors affecting institutions of higher education i.e. universities. The changes in the economic environment are also causing significant changes to national and international organizations, and to governmental systems such as moving from a centrally controlled economy towards a free-market economy. The explosive growth in digital and Internet technology, and telecommunications represented another catalyst of environmental change (Magrath, 2000). Thus, universities, traditionally operating on a highly individualized basis will experience increased competition, a need for increased national and international collaboration in research, and introduce new educational delivery and support methodologies.

As higher educational institutions everywhere begin to face similar challenges, and with increased competition in the higher education industry, the institutions i.e. universities respond by becoming more market driven and adopt a more global perspective by focusing to increase foreign student enrollment especially from less-developed countries. A global shift to knowledge economies is also increasing the importance of higher education. Further competition is in the form of new entrants to the higher education industry in response to increasing global demand for higher education (The Futures Project, 2000). Globalization is also affecting methods of educational delivery and support. Traditional classroom delivery is now enhanced with electronic learning support. Online courses, virtual classrooms and Web-based tutorials are some delivery methodologies for distance education across borders as a result of globalization.

However, the effects of globalization in the higher education industry cannot be left completely to free market mechanisms as issues such as quality and quality control, accreditation, educational relevance, the effective use of new technology, and ethics needs to be in place and regulated. Higher educational institutions cannot be allowed to only focus on profitability but must develop a strong sense of responsibility to educate and assist less-developed nations establish or acquire sound educational systems for future generations (The Futures Project, 2000; AUT and DEA, 1999).

The Impact of Globalization

Globalization is rapidly reshaping the landscape of higher education. Driven by global shifts to free market mechanisms that cause continuously increasing international trade, foreign direct investments and other economic relationships among nations, multinational or transnational corporations constantly need to obtain and maintain their core competencies and competitive advantages to generate economic wealth with scarce resources. An increasing awareness of the need to focus on the consumer, and growth of new consumer experience and consumer satisfaction business thinking has also contributed to changes in customer relationship models. A continuous flow of human capital talent and skills is required. Institutions of higher education, both public and private institutions are the source for current and future human capital.

So, how has globalization affected Malaysia’s higher education sector, especially the private institutions of higher education or Institusi Pengajaran Tinggi Swasta (IPTS)? We can group the impact of globalization in the Malaysian private higher education sector into four major categories:

  1. Creation of world-class education – Curriculum, Research, Technology and Collaboration
  2. Quality assurance and accreditation – Ethics, Branding and Ranking
  3. Academia and Industry collaboration
  4. Malaysian Government as catalyst

Creation of world-class education – Curriculum, Research, Technology and Collaboration

Globalization and the transition to a knowledge-driven society or economy have created a greater demand for higher education. This demand will constitute a good market for cross border or transnational education providers. Transnational education can take the form of franchising, twinning programmes, offshore courses, distance learning and the setting up of branch campuses and other forms of collaboration. In other words, there is a need to create world-class institutions of higher education or world-class universities. What is meant by “world-class”?

According to professor Dr. Stephanie Fahey, the common yardsticks that make a university world-class are staff and student performance, which includes research output and impact, students’ academic results, graduation rates and employability (Aiming for world-class, 2006). Phang argues that, “we need to produce world-class graduates who possesses the ability to bring in a range of relevant variables into our thoughts and decision-making processes. It means being international in outlook and possessing a keenness to expose ourselves to issues and happenings around us” (Phang, 2005).

Therefore, it becomes very important for the Malaysian private higher educational institutions to possess the ability to design, develop and deliver the correct curriculum to meet industrial changes and development brought about by globalization, for e.g. globalization has created the need for international management or know-how to manage across borders with different cultures and practices. Thus, the curricula needs to educate our students in international management and cultures, and problem identification and solving.

To create and provide world-class education, Malaysia’s private universities need to also conduct relevant international-level research, for e.g. we should conduct research into understanding and learning global competitive advantages so that our small and medium enterprises (SMEs) and industries can grow and compete at the international or regional economic level instead of continuing to depend on government incentives and protection, and foreign tariff exemptions. In 2007, Malaysian SMEs make up 99 percent of the total number of registered businesses, 56 percent of total employment, but accounts for 32 percent of the GDP and 19 percent of total exports (Government to ensure, 2008).

The education and exposure to high technology and information and communication systems in the areas of enterprise systems, business intelligence systems, supply chain management and customer relationship management systems are necessary.

Where our private universities lack in ability and know-how, they need to collaborate with more advanced higher educational institutions and also with industry. We can benefit from such collaborations with the transfer of knowledge and technology and maintain abreast of industry needs and changes. We cannot continue to produce human capital graduating with irrelevant and obsolete knowledge, technology and skills.

Quality assurance and accreditation – Ethics, Branding and Ranking

Prospective students of higher education are consumers, and consumers have rights. Students have rights to quality education. The Malaysian government is responsible to ensure that our private higher educational institutions provide quality education by providing official accreditation and annual evaluations (Azizan, 2006; Uda Nagu, 2006b).

Quality education can only be assured when the private higher educational institutions meet the necessary criteria in terms of relevance of curricula, qualifications of academia, graduation results and performance, quality and employability of graduates, research and collaborations, and policies and practice of ethics and corporate governance.

Ethics and corporate governance of some private higher educational institutions are questionable as some act as a front for illegal immigration activities, declaring foreign workers as students (Karim, 2006; Sujata, 2006).

With these criteria and quality accreditation in place, private higher educational institutions can build their respective branding and establish respectable ranking positions in the educational field they pursue, for e.g., excelling in providing management education, information technology or engineering education. With these credentials, we can attract more foreign students to study in Malaysia and more international collaborations with other institutions of higher education (All out to, 2006; Martin, 2006).

Academia and Industry collaborations

Another important aspect for our private higher educational institutions is to establish academia and industry collaborations. Why is this important? As Malaysia transitions to a knowledge economy or society, a strong collaboration between academia and industry will “create the impetus for the creation of a new workforce that will strengthen the Malaysian economy. On the other hand, a weak link between academia and industry will create unemployable graduates who do not fit the requirements of the new economy and will cause Malaysia to lose its competitiveness” (Phang, 2003; Help shape varsity, 2006).

Academia and industry collaborations will benefit both parties. Academia gets more aligned to the needs of the industry and will be able to produce graduates relevant to the industry. Companies in the industry will benefit from the research capabilities of the universities and may even be able to commercialize some of the research findings of the universities. A close collaboration will establish the academia as a knowledge providing resource to the industry value chain and will help improve the competitiveness of Malaysia. A higher educational institution that establishes cooperative ties with industries can rise in recognition surpassing its more established peers (Gomez, 2009; Ramachandran, 2007; Ismail, 2007; Indramalar, 2003).

Malaysian Government as catalyst

The Malaysian government, through the ministry of higher education, in addition to being the guardian to ensure quality education and ethical practices in the private higher education sector, needs to also play an active role in promoting private higher education and enabling academia and industry collaborations.

The government needs to develop a vision and sustainable roadmap for the growth of the private higher education sector. This is important as the private educational institutions are managed like commercial corporations and hence, lesser administrative barriers exist in order to respond quickly to market and industrial changes and developments.

Development and research funding, and tax incentives should be made available to the private higher educational institutions to enable them to grow and produce industry relevant graduates thereby helping Malaysia build and maintain competitiveness and build human capital so vital for our country’s future and economic well-being (IPTS, 2006; Private colleges want, 2006).


While globalization is changing the landscape of the private higher education sector, Malaysia has already embarked on transitioning to a knowledge economy (Malaysia on course, 2009). Higher education represents the nucleus of the knowledge economy. In order to continue our economic growth, maintain and generate new competitive advantages in the global market place, we need to invest in and build our human capital. This can be achieved through creating and delivering world-class education.

To create world-class education, we need to be nimble, flexible and global in outlook – basic characteristics expected from the private higher education sector, but possessing these characteristics are insufficient, as we also need to develop core competencies in:

  • Designing, developing and delivering industry relevant curricula
  • Achieving and maintaining the gold standard in educational and ethical excellence
  • Establishing a high technology focus and usage
  • Establishing international collaborations in educational technology and research
  • Establishing academia and industry collaborations
  • Establishing infrastructure and support programmes by the government to nurture and grow the private higher education sector


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All out to attract foreign students. (2006). The Star: Education, September 3, pp. 2-3

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Azizan, Hariati. (2006). "Setting a new standard". The Star: Education, July 16, p. 7

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Malaysia on course towards full-fledged k-economy. (2009). New Straits Times, August 7, p. B4

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Phang, J. (2003). "Academia and industry: The Stanford experience". The Star: InTech, July 29, p. 39

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Porter, Michael. (1998). The Competitive Advantage of Nations. New York, NY: Free Press

Private colleges want more government backing. (2006). New Straits Times, February 28, p.

Ramachandran, Sonia. (2007). "When industry and university forge ties". New Sunday Times: Learning Curve, July 22, p. H2

Ramli, June. (2006). "More foreign universities eager to set up campuses in Malaysia". New Straits Times, August 9, p. 14

Sujata, V.P. (2006). "Kedah college under probe". The Star, September 9, p. N8

The Futures Project (2000). The Universal Impact of Competition and Globalization in Higher Education. The Futures Project: Policy for Higher Education in a Changing World, Brown University, Rhode Island http://www.futuresproject.org/

Uda nagu, Suzieana. (2006). "Fruitful tie-ups". New Sunday Times: Learning Curve, July 9, p. H2

Uda Nagu, Suzieana. (2006). "A gold standard for education". New Straits Times, August 20, p. 24

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