INTRODUCTION

This book examines education at the university (or tertiary) level in the European Union, the United States and China. The aim of this analysis is to determine how well the EU as a region performs with respect to the US and China and how to improve higher education in the EU — and with it the EU's stock of human capital.

The skills, abilities and innovative capacity of European citizens are vital to competitiveness of European economies. Data from the Organisation for Economic Cooperation and Development (OECD) have repeatedly shown a positive correlation between high levels of tertiary education and employment, earnings, innovation and economic prosperity. We no longer live in an industrial age in which amassing financial capital alone is enough to attract the manpower and — most importantly — the brainpower that economies need to create jobs and growth. Some have suggested that our current period could best be dubbed the 'talent era', in which the balance of economic strength might be tipped in favour of those countries that are strong innovators. And for innovation, one needs a healthy stock of human capital.

The so-called 'brain race' is fuelled by universities; the public and private sectors must also foster the development of skills. Global talent mobility is part of the international talent balance, as is the employability of graduates. It is still unclear which nations will emerge as the global leaders in the coming decades. The world is changing rapidly, and a lack of progress can spell decline. In the 'brain race', countries will have to run to stand still and they will have to progress very quickly if they want to emerge as global talent leaders.

The EU has recognised the role of tertiary education as a benchmark for overall prosperity and long-term economic growth in Europe. The Europe 2020 Strategy (European Commission, 2010a), set the goal of increasing the tertiary graduation rate among 30- to 34-year-olds to 40%. The EU has also established scoreboards (such as the EU Innovation Scoreboard and the EU Higher Education Mobility Scoreboard) in a number of areas. These scoreboards include information on how Europe's most precious resource — human capital — is changing. Viewed intra-regionally, Europe is making progress in developing its talent pipeline. But if we take a step back and set the EU in the context of how the US and China are doing — and are likely to do in the future — several lessons can be drawn. The EU must remain competitive in the emerging knowledge-based global economy by strategically growing its talent pipeline. With this aim in mind, the EU and its member states should:

• conduct in-depth research into the state of human capital in the region,

• create incentives to counteract a dep