This review explores the importance of higher education as a driver of economic competitiveness in both industralised and developing countries. As pointed out by the Organisation for Economic Co-operation and Development in 2008, tertiary education contributes to the formation of human capital, the building of knowledge bases, the dissemination and use of knowledge, and the maintenance of knowledge.
While the returns on investment in basic education are visible and almost immediate, the returns to higher education are far more elusive and difficult to measure. A growing body of literature suggests that the conventional estimates of the returns to education do not accurately reflect the social value added by tertiary education, including job creation, good economic and political governance, increased entrepreneurship, and increased inter- generational mobility.
As participation in tertiary education expands in both industrialised and developing countries, tertiary education institutions have assumed responsibility for a far wider range of occupational preparation than in the past. Substantial reforms are thus taking place in tertiary education systems aimed at encouraging institutions to be more responsive to the needs of society and the economy.