Ranking in the Knowledge Economy

"For all the criticism of university rankings and all of their limitations, they play a powerful and arguably a positive role in global higher education," said Phil Baty, Editor for the Times Higher Education (T.H.E.) World University Ranking who lectured at ETH Zurich this week. An expert and influential figure in higher education, Baty has his finger on the pulse of the education industry. Universities, today, face increasing pressure to deliver the intellectual capital that drives innovation and thus the economic standing of countries. Their role has changed from that of a mere provider of education to that of a broker for knowledge-based economies.

In his lecture, Baty described the powerful role that university rankings play in society. He expressed that rankings provide performance benchmarks, visibility to emerging institutions, inform student choice, and influence strategic planning prompting not only competition, but also institutional collaboration. They are also vulnerable to critics who recognize that institutions may attempt to "game" the system by investing in targeted areas that will increase scores in the ranking metrics. Baty cautioned that universities should consider investments for the right reasons ¨C to improve quality. The resulting ranking position should be by-product of excellence and not the driving force to adapt and optimize strategy.

Going Global

Advancing technology and shifting demographics to developing nations, primarily in Asia, have changed the landscape of higher education. Baty indicated that in the past few decades, higher education has transformed from an "elite system" into a mass industry with an estimated 260 million enrolled students worldwide by year 2025. Within this new landscape, the international competition for talent has prompted universities to enhance their reputations by aligning with other institutions and with industry to enrich their knowledge base. Baty reported on two studies during his lecture that identified that ranking and reputation or the "brand" of an institution is currently the most important factor informing student decisions to study abroad and for professors considering their next career move.

At ETH Zurich, researchers have reported global collaborations with nearly 10,000 universities, institutes, non-governmental organizations, public sector authorities, and private industries. In 2014, a reported 57% of scholarly publications were co-published with an international collaborator. The institution has become a veritable melting-pot and with a multi-cultural faculty, staff and students its ¡°International Outlook,¡± one of the five key indicators for the external page T.H.E. World University Rankings, consistently exceeds its higher-ranked competitors.

Behind the Rankings

Whether one agrees with the methodology or not, university rankings have become highly influential mechanisms. Originally developed as a tool to help students and their parents select the right school, they are now considered "geopolitical indicators" that influence government policy and industry investment. So how does the T.H.E. determine which university is overall best in the world?

It all rests on five key metrics: teaching and learning, research, and citation impact - each weighted at 30%; industry income valued at 2.5%; and international outlook worth 7.5% of the overall score. Putting "big data" to work, T.H.E. crunches data from 13 performance indicators, thousands of data points, and responses from reputational surveys to derive a composite score. Reported faculty/student and income/student ratios reflect the quality of the knowledge transfer occurring within the walls of the institution. Industry investment, innovation, research volume, and citations speak to the reputation of an institution and their ability to transfer knowledge outside the walls of the classroom to a broader society.

While purporting the value of university rankings, Baty acknowledges that limitations are inherent in such mechanisms and; therefore, transparency in reporting how source data is collected and the methodology used to assess it is important. Transparency will be even more important for T.H.E. in the 2015-2016 rankings report as this year they change the structural source data provider from Thompson Reuters to Elsevier and Scopus.

The Future of Swiss Universities

Public investment powers the knowledge economy in Switzerland and its European neighbours; however, is it a sustainable model to rely on public funding alone? According to the latest The Organisation for Economic Co-operation and Development (external page O.E.C.D.) statistics, Switzerland spends 5.5% of its gross domestic product (G.D.P.) on education. This is more than a full percentage point less than the U.S. that spends 6.6%. In addition, recent immigration reform has presented challenges for the Swiss in accessing funding through Horizon 2020 and other grant funding. Never-the-less, while U.S. and U.K. universities consistently dominate the top of the T.H.E. World University Rankings, seven Swiss public universities stand out with a placement in the top 200. Baty indicated in a past interview that with international talent and funding, Swiss universities have every chance of making it into the top ten of the T.H.E. rankings.