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The dynamics of human capital and the world of work

Towards a common market in contemporary tertiary education

Author - Aidan Kenny


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5 World Trade Organisation

Other influential supranational organisations are also seeking reform of education and training. Since the 1990s the World Trade Organisation (WTO) has consistently argued for the liberalisation of the education sector. Murphy (2008: 162) states: ‘It is hugely significant, philosophically, politically and pedagogically, that education in general, and higher education in particular was defined as a “service” in the General Agreement on Trade in Services (GATS) as a WTO directive in 1995’. According to Verger and Robertson (2008) GATS makes provision for the market liberalisation of twelve service sectors in total. Educational services are included and separated into five areas: primary education, secondary education, higher education, adult education and other education services. GATS outlines four modes of commercialisation of the service sectors:

  • cross border supply
  • consumption abroad
  • commercial presence
  • presence of natural persons.

GATS also makes reference to Domestic Regulations in signatory states in relation to education providers, citing three main areas where barriers need to be addressed, with clear, transparent and equitable procedures put in place. These areas are qualifications, technical standards, and licensing requirements. While member states are expected to enter into discussions on GATS they are not obliged to make a liberalisation commitment. In making a liberalisation commitment a state enters into a binding regulatory agreement, which has two primary regulations:

  • national treatment (not less favourable to foreign agencies)
  • market access (the elimination of barriers that are inherent in national systems).

Hyslop-Margison and Sears (2006: 11) in their critique of neo-liberalism, free-market practices and policies in higher education write that ‘The WTO now routinely dictates to governments on the “legality” of their domestic policies with regards to their potential interference with unfettered global market practices’. Within the discourse of the free market the tertiary education and training sector is not solely viewed as both a producer of knowledge/skills and custodian of award systems which are bounded in the socio-political regulatory traditions of nation states and regions within states. It is also a potential free-market zone, which has been underexploited mainly due to regulatory barriers, diversity of systems and the lack of compatibility, transferability and standardised communication toolkits that can mediate between and within systems. While tertiary education and training is a resource-hungry and investment-needy sector it is also an economic growth area, employing hundreds of thousands of teachers, trainers, lecturers, researchers, administrators, support and technical staff. Making provision for the education and training needs of hundreds of millions of people, this has the potential to generate vast sums of revenue. Lynch (2006), referring to reports by UNESCO and investment bankers Merrill Lynch, estimates the global value of the education sector to be worth more then 2 trillion dollars. However market penetration of education systems is difficult because these systems are complex, differentiation is inherent, bound in the regulatory policy and socio-cultural traditions of nation states and sectoral developments. For optimal free-market mechanisms to operate at national, regional and international levels, a common understanding or currency framework needs to be developed by policy makers.

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