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2015/ISOM/SYM/007 Session II

Peru’s Challenges in Higher Education

Submitted by: Antonio Ruiz de Montoya University

Symposium on 2016 APEC PrioritiesLima, Peru

10 December 2015

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Peru’s challenges in higher education

Fernando VillaránDean of the Engineering and Management SchoolAntonio Ruiz de Montoya UniversityDecember 10, 2015

Asia-Pacific Economic Cooperation - APECSymposium on APEC Priorities

Issues

1. Macroecomic success2. Remaining structural problems3. Productivity4. Informality5. The higher education sector 6. Government of Peru Programs

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Macroeconomic success

Peru’s Per capita

incomeGrowth

1961-1990and

1990-2013

Source: “Peru, Building on Success”, World Bank Report, Oct2015

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Peru’s verylow

inflation(real and expected)

Source: “Peru, Building on Success”, World Bank Report, Oct2015

Peru’sexcelentresults in poverty

reduction2000-2013

Source: “Peru, Building on Success”, World Bank Report, Oct2015

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Poverty and Extreme Poverty evolutionin the last years

Population in poverty in 1990: 58% (35 points reduction)Population in Extreme Poverty: 20%(16 puntos reduction)

Peru’sreduction

of inequality

Source: “Peru, Building on Success”, World Bank Report, Oct2015

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In the other hand, the same documentfrom the World Bank concludes thatPeru has 4 major problems that limit

it’s future growth:1. Insufficient infrastructure

2. Narrow export diversification3. Large informal sector

4. General low productivity

Peru’s insufficient infraestructure

Source: “Peru, Building on Success”, World Bank Report, Oct2015

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Peru has become a mining country: Mineral and oil exports went from

53% in 1990 to 68% in 2013

Source: “Create to Grow”, CONCYTEC.2014

Size of theInformal Sector

as % of GDP2007

Previous studies on Informal Sector:

1. Hernando de Soto (1986), 1980-1986: 55% of GDP

2. Schneider (2000)1989-1990: 44% of GDP

3. Loayza (1997)1990-1993: 57.4% of GDP

Source: “Producción y empleo informal en el Perú”, INEI, Lima, 2014 (with the technical support of IRD of France

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Informal employment in Perú 2007: 79%

This is the newdiscovery

Informal Employment in theInformal sector

Informal Employment in theFormal sector

Formal Employment

Labor informality is found mainlyin the micro and small scale enterprises

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The low productivity issue

Productivity by Industry

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Productivity by size of firms

Productivity by sectors

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Changes in productivity by sectors2000 to 2011

¿Where does education enters here?

We are using Peter Drucker’s concept: “Value is now created by

‘productivity’ and ‘innovation’, bothapplications of knowledge to work”

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The key of productivity is knowledgeand knowledge is education

The path for increasing productivitymassively is with high quality and

creative education

The expansion of higher education in PeruNumber of students

Source: Ricardo Cuenca-IEP

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The growth of higher educationNumber of universities

Fuente: Ricardo Cuenca-IEP

Relation between higher and technicaleducation 2008-2013 (Working force)

Fuente: La inadecuación ocupacional de los profesionales con educación superior-MTPE-2014

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Low performance in education indicators

Source: “Peru, Building on Success”, World Bank Report, Oct2015

Low investment in education and lowperformance of higher education

• Public expenditure in education in Latin America (UNESCO), as a percentage of GDP (2013 figures): Venezuela 6,8% Colombia 4,9%Bolivia 6,4% Chile 4,6%Jamaica 6,3% Uruguay 4,4%Argentina 6,2% Paraguay 4,3%Brasil 5,8% Perú 3,3%México 5,1%

• In the QS Ranking of the best latin american universities, only 3 peruvianuniversites appear in the first 100: (i) la Pontificia Universidad Católica del Perú (PUCP), 19th place; Universidad Nacional Mayor de San Marcos (UNMSM), 60th place and Universidad Peruana Cayetano Heredia (UPCH), 64th place.

• Ahead of the PUCP comes: 8 Brasilian universities, 4 from Chile,, 2 from México, 2 from Argentina, and 2 from Colombia.

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Fortunately the Peruvian governmentis reacting: has approved a new

University Law to boost quality, and isrising investment in education (4% of

GDP in 2016)The Government is also implementing new and massive programs:• Grant 18: for low income students• Credit 18: for the next tier of income• Grants for post graduate studies abroad• Quali Warma: food program for 3 million students• Training programs for teachers• Among others

Thank you