by John Aubrey Douglass, Richard Edelstein and Cecile Hoareau

From Boom Spring 2014, Vol. 4, No. 1

A global hub for higher education.

The world is thirsty for higher education. International talent continues to seek access to colleges and universities in the United States, and particularly in California, which boasts a pioneering higher education system with global brand-name appeal that is unmatched by any other state—indeed any other nation. Yet California, and the United States in general, are underperforming when compared to our economic rivals in terms of the percentage of international students we have enrolled in our higher education institutions.

At the same time, California’s public higher education system has suffered dramatic long-term cuts in public funding, creating unprecedented financial challenges and threatening its ability to grow in enrollment and academic programs required to keep pace with the state’s growing population.¹

California, and the world in general, are also confronted by a long-term projected shortage of people with advanced educations, including engineers, managers, and decision-makers trained in science, technology, engineering, and math needed to sustain knowledge-driven economies. California, like other major economies, always should be looking for ways to boost regional economic activity. International students already represent a significant positive cash flow to the communities in which they live and learn.

These circumstances pose a tremendous opportunity. In the following, we propose and discuss the idea of developing a coherent strategy related to attracting and enrolling significantly more international students by establishing one or more regional-based “California Higher Education Hubs.” California’s EdHub would voluntarily link a regional set of universities and colleges to help recruit, enroll, and provide support services, such as housing, for talented international students. At first, an EdHub might include a set of five to ten institutions in a region, offering degree programs in fields that have international demand, or possibly in a sequential mode between, say, a community college and a private, bachelor’s degree–granting college or a local California State University campus. It would require a minimal investment by universities and colleges, along with some form of “joint venture” capital from local governments and business sectors that would gain the most from the talent and business activity generated.

One goal is to expand California’s capacity to enroll talent from throughout the world, in part to support California’s economy; but another equally important goal is to help formulate a funding model that, as demonstrated in other parts of the world, generates new revenue to help subsidize and expand access to higher education for native Californians. Even with an improved economy and projections of a state budget surplus for the first time since the Great Recession, there are few indicators that California’s government will make any significant new investment in public higher education. We need revenue growth for California’s still cash-starved public higher education system.

The California EdHub idea is about the money, but it is also about solidifying California and metropolitan regions such as the Bay Area, Los Angeles, and San Diego as global talent magnets, further elevating the state as a global actor with both economic and, as we will discuss here, humanitarian benefits—and it is achievable.


The most competitive economies in the world will be those that both nurture and develop native and international talent from throughout the globe. These are not mutually exclusive goals. Higher education and its two primary outputs—talent and new knowledge—are recognized worldwide as major contributors to regional economic growth, and they are the primary indicators of future national prosperity, so it’s no surprise that our hub concept is a California twist on an idea already being tested elsewhere around the world.

Clearly recognizing that the global market of international students is growing rapidly, China, Singapore, Qatar, the United Arab Emirates, South Korea, Malaysia, and a number of cities in the European Union have all launched highly publicized efforts to create “world-class universities” and higher education hubs in cities or regions over the past decade. Largely inspired by the experience of the San Francisco Bay Area in demonstrating the power of using prestigious research universities, such as Stanford and Berkeley, as key resources and partners in creating new knowledge-intensive industries and enterprises, these nations have launched their own new higher-education “hotspots.” These efforts usually leverage large investments of public and private funds to attract leading research universities from the United States and Europe to locate satellite campuses or facilities in foreign countries.

These global hubs for higher education represent a new competitive force in the global market for talented people. Higher education administrators and scholars are curious and concerned about the sustainability of these new and rapidly expanding initiatives. Many are currently functioning with large government or private sector subsidies. Will that continue? Will international student demand ebb?

One recent report estimates that world demand for international higher education will increase from 1.8 million in 2002 to 7.2 million or more in 2025 as countries such as China, India, Indonesia, Brazil, Mexico, Chile, South Korea, Vietnam, and Saudi Arabia grow economically and struggle to meet domestic demand for high-quality, advanced education.² International students are already a major stimulus to the US economy. American colleges and universities enroll over 800,000 international students. These students paid tuition and fees estimated at a total of $13 billion during the 2009–2010 academic year. Add in housing and other living costs and the direct total economic impact of international students is nearly $19 billion a year. The real economic impact is likely much larger than this, if indirect impacts such as job creation and additional potential for international business ventures are included. While those numbers may sound large, only about 3 percent of undergraduates in accredited colleges and universities in the United States are international students. This compares to over 10 percent in a similar grouping of European nations.³ Even in graduate education, top providers in Europe have a higher number and higher percentage of foreign students—over 28 percent versus 24 percent in the United States. International student numbers continue to grow in American universities and colleges, but those numbers are growing faster in other parts of the world.

Americans are used to the idea that we draw talent to our universities and colleges from throughout the world, in turn helping to create the highly skilled labor pool essential for high-tech and other industries. The United States has done this for decades, in large part because of the reputation of our existing higher education institutions and also because the nation is known as a land of immigrants, open to those who can come and contribute to its economy and society. But that comparative advantage is eroding, as world demand for higher education continues to climb, driven by the insatiable desire for socioeconomic mobility of individuals and by governments that widely recognize that broad access to higher education and the production of degrees at the baccalaureate, professional, and doctoral level are primary factors for economic development.

Lawmakers and business leaders in the United States need to better understand the global market position of our higher education institutions. Of all America’s exports, higher education is one of the service sectors with the most potential for growth. It is, however, also an industry in need of a larger global view. When administrators look at the bigger picture, they will see that global competition is gaining rapidly. As universities elsewhere in the world are improving their quality and marketing, and as governments expand programs intended to draw the world’s pool of talented and increasingly mobile young people, California—and the United States—has been underperforming at the undergraduate level, and our strength in enrolling foreign students in graduate programs has become less competitive.



1 See John Aubrey Douglass, “Can We Save the College Dream?: The Death and Life of California’s Public Universities,” Boom: A Journal of California Vol. 1, Number 2, pps 25–42,; also John Aubrey Douglass, “To Grow or Not to Grow? A Post-Great Recession Synopsis of the Political, Financial, and Social Contract Challenges Facing the University of California,” Research and Occasional Papers Series (ROPS), Center for Studies in Higher Education, CSHE.15.13 (December 2013):

2 A. Bohm, et al., The Global Student Mobility 2025 Report: Forecasts of the Global Demand for International Education (Canberra, Australia, 2002).

3 John A. Douglass and Richard Edelstein, “The Global Competition for Talent: The Rapidly Changing Market for International Students and the Need for a Strategic Approach in the US,” CSHE Research and Occasional Paper Series (ROPS), CSHE.8.2009, October 2009: id=341; A shorter version of this paper was published in Change magazine, July/August 2009. On recent data regarding international graduate students in the United States, see Sarah King Head, “US: Chinese Help Spur Modest Graduate Increase,” University World News, 10 November 2010:

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