"Thirst", "mania", even "abnormal": these are unusual words to describe a nation's attitude to education. But people reach for extremes when discussing education's hold on South Korea's collective psyche and its shaping of society.

The statistics for ÖйúAƬ tell a remarkable story. At 53 per cent, South Korea has the highest proportion of graduates among 25- to 34-year-olds of any nation in the Organisation for Economic Cooperation and Development, according to 2008 figures. That compares with 38 per cent for the UK and 42 per cent for the US. By 2025, about 80 per cent of South Korean 25- to 44-year-olds will have participated in ÖйúAƬ, the OECD forecasts, the highest rate in the world.

The nation of 49 million people has 211 colleges and universities, with junior colleges, education colleges and graduate institutions taking the tally of ÖйúAƬ institutions to 406. By comparison, the UK has a population of nearly 62 million and 165 ÖйúAƬ institutions.

Higher education is so central to the country's structure that the government hopes to use it to help transform relatively monocultural South Korea into a more modern, multicultural society. There are already programmes to attract more international students, recruit leading academics from the West and tempt foreign universities to establish local branches. The process, some believe, may help shift South Korean students away from a deferent culture of rote learning towards critical analysis. Ultimately, the aim is to help a nation that sped from harsh poverty to advanced capitalist economy at breathtaking pace to gain international status.

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But what is the cost of this fervour for ÖйúAƬ? Many observers argue that South Korea's universities drive its hierarchical society. Some observers say that the country has gone too far in its enthusiasm for ÖйúAƬ, and that its university system plays too large a role in cementing social divisions rather than imparting knowledge. Competition for places at the best universities is so intense, others claim, that people are put off having children because of the cost of getting them into ÖйúAƬ.

Ha-Joon Chang, reader in the political economy of development at the University of Cambridge and author of 23 Things They Don't Tell You about Capitalism, says that at one level, the South Korean attitude to ÖйúAƬ "is a great success story. At another it's pathological."

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The question is, then, at what point the insatiable appetite for ÖйúAƬ in South Korea becomes counterproductive - and what lessons other nations can take from its experience.

You can learn much about South Korea's history and the concerns of its modern society through an evening trip on the cable car up Namsan, a forested hill in central Seoul. The summit is capped by the restored remains of the city's ancient fortress walls and by the N Seoul Tower, where an observation deck puts you 370m above sea level.

Seoul has a population of 10 million, and the city stretches to the horizon in all directions. Light blazes from the skyscrapers of the city's central business district and the neon-lit shopping streets, still packed at 9pm. On the sides of the skyscrapers, giant video screens flicker. The buildings are topped by the names of South Korea's biggest multinational companies, such as Samsung and LG.

There is a darker expanse of low-rise buildings where the US Army garrison Yongsan sits, remarkably close to central Seoul, with thousands of troops acting as a bulwark against North Korea, just 50 miles to the north of the city.

Further into the distance is the broad Han River, spanned by a bewildering number of bridges, across which stretch chains of car headlights in traffic jams.

An island in the Han River is home to Seoul's financial centre and boasts the city's tallest skyscraper. In former industrial areas alongside the river there are now parks. This intense concern for environmentalism and urban regeneration was mirrored in the 2005 reclamation of the Cheonggyecheon River in central Seoul, previously covered over by a motorway. The revealed river, underlit with blues and oranges at night, is now the centrepiece of a narrow strip of parkland running through the city.

Somewhere in the glittering lights, Seoul has dozens of universities. The country's most prestigious are the so-called SKY triumvirate of Seoul National University, Korea University and Yonsei University. The last two are private institutions.

A place at one of those universities has traditionally been essential for students seeking to enter the nation's elite, whether in government, business or academia.

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But increasingly highly regarded are three specialist scientific institutions - the Korea Advanced Institute of Science and Technology (KAIST), the Korea Institute of Science and Technology (KIST) and Pohang University of Science and Technology (POSTECH).

In the Times ÖйúAƬ World University Rankings 2010-11, there were four South Korean universities in the top 200: POSTECH (28), KAIST (joint 79), Seoul National (joint 109) and Yonsei (joint 190).

To grasp the centrality of education in Korean culture, you need to look to the past, says Byoung-Joo Kim, an adjunct professor at Ewha Women's University and former consultant economist at the World Bank.

Kim, who now runs a consultancy that advises government and business on policy and human resources strategies, argues that one crucial factor was the merit-based system for selecting government officials that was in place under the Yi, or Chosun, dynasty that ruled between 1392 and 1910. This was a "vehicle, or tool, for common people to step up in social mobility", he says.

The following period of Japanese colonial rule (1910-45), still bitterly resented by many Koreans, added a universal system of education and an infrastructure for learning, Kim says.

The collapse of the occupation and the Korean War (1950-53) destroyed the old class structure, creating equality through general poverty. The stage was then cleared for education to take its pivotal role in society.

Before the manufacturing and exports boom of the 1970s and 1980s brought economic transformation, South Koreans were "dirt poor", Kim says.

"The only thing Koreans could think about to get out of that situation was education. In other countries, other cultures, they don't have that realisation of how important education can be."

That prizing of education became part of the national consciousness.

Roland Davies, director of the British Council in South Korea, says: "One theory you will hear from time to time is that Korea is a country with few natural resources. What it does have is its people. The way you succeed in life is through education."

As this culture took hold, parents became accustomed to channelling their resources - emotional and financial - into their children's education.

Aidan Foster-Carter, honorary senior research Fellow in sociology and modern Korea at the University of Leeds, says that from the beginning of the independent republic of Korea, there was "a mania for education" that led to a significant expansion of the university sector.

Entry to universities is determined through the mainly multiple-choice College Scholastic Ability Test (CSAT), although the government is aiming to reduce the role of the exam in admissions.

Students are under intense pressure as they prepare for the exam. Such is the societal importance of the CSAT that there are stories of police clearing traffic to ensure that students held up in a jam reach the exam room.

Fierce competition has sprung up as parents hire private tutors to give their children the best chance of success in the CSAT.

"This has all grown out of the intense struggle to get into the Korean equivalent of Oxbridge," observes Foster-Carter, noting the "absolute hell" students undergo preparing for the exam.

He sees the preoccupation with education as having mixed effects: highly intelligent individuals, but a pressurised society.

"It is a very competitive society, meaning individuals are competing to get into the best primary schools, the best secondary schools, so that they will get into the best university, so they can get the best marriage, and the best career," Foster-Carter says.

The main critique from the South Korean Left is that the current conservative government "encourages meritocracy, and that meritocracy isn't good for the poor, because the rich have all the advantages and can pull the strings", he adds.

Yet despite South Korea's educational achievements, there is a discernible mood of dissatisfaction in its universities. Some point to the number of young people choosing to leave the country to study abroad as a sign that something is wrong. After China and India, South Korea is the biggest exporter of students, with 105,3 of them studying abroad in 2009.

The impressive campus of Seoul National University, the country's most prestigious institution, offers few signs of that discontent. Immaculate new buildings include a Samsung-funded art gallery and an international office.

The campus is to the south of Seoul, amid tree-covered hills that rise steeply on all sides. The government moved the main campus away from central Seoul in 1975 with the aim of keeping student protesters away from the centres of powers and under tighter control. South Korea's students have traditionally been politically influential. Fierce - and violent - demonstrations in 1987 helped to usher in democracy.

In the palatial boardroom of Seoul National's international office, Junki Kim, dean of international affairs, is focused on ensuring that his institution improves its global standing.

"Based on our performance, based on the quality of teachers we have, based on the equipment and investment in facilities we have, the amount of work we have done in teaching and research, we have not been recognised well around the world," he says. "That is a huge disappointment, not only for the university but also for the students, alumni and the nation as a whole."

As in the rest of the country, internationalisation is high on the agenda.

Junki Kim describes Seoul National's internationalisation strategy as involving "responsibility and obligation" to developing countries such as Vietnam that are poised to go through the same transition to a market economy that South Korea has undertaken. The university is weighing plans to open a branch campus there.

Seoul National students being sent abroad benefit, he adds, by improving their "competitiveness".

UK pro vice-chancellors for internationalisation may be surprised to hear Junki Kim admit that the university's strategy is losing it money. "We are subsidising students to go abroad," he says. "Also, we are giving scholarships to people from abroad."

Eighty nations, he notes, are represented in the student body.

"Further down the road, there may be some revenue generation. But we don't foresee that happening in the near future. We think it is an absolutely needed investment."

Sang-Ki Chung, president of the South Korean government's National Institute for International Education (NIIED), says that 10 years ago, there were 6,000 foreign students in South Korea. Now there are 80,000 (70 per cent of whom are from China) and the government has set a target of 100,000.

The motivation, he says, is to move away from being a "monoculture". While there is pride about being "one ethnicity, one blood, one country", there is also recognition of the need to change.

"Just like America or Britain, we have to have a society that is multicultural," Chung says. "We have to introduce our people to that culture. At home, our own students have to have an experience of connecting with foreign students."

The attractions of South Korea for students include its low levels of crime, its "open society" and its high-tech industries.

Chung adds: "For many students from those undeveloped countries - China, Vietnam, Cambodia - it is better to come here than go to America. What they learn from America can't directly apply to their society. Perhaps they think we are in the middle."

There are clearly some teething problems. Chung says he will be making a TV appearance "to say to our people, 'Treat them (foreign students) well in order to get the return from them.' Some of our Koreans despise them...Our government and our politicians always emphasise that we have to be kind with these foreign students and we have to treat them well - they will become our assets in the future."

And it remains to be seen whether prospective foreign students will be put off by increasingly tense relations with North Korea, which last month shelled a South Korean island and killed four people.

The government offers 800 scholarships a year to overseas students coming to South Korea, bidding to build links with future leaders of other societies.

The NIIED is also looking to diversify the country's markets. It held a recruitment fair in Saudi Arabia, and future events will take place in the Czech Republic and Poland.

Another government department has big plans to attract foreign universities to make domestic institutions more competitive, and appears relaxed about the possible consequences, including bankruptcy reducing the number of South Korean institutions.

Hyuk-Chae Koo, director of the Ministry of Education, Science and Technology's global human resources division, says the government wants to give universities more autonomy. Universities, he says, "have to find their own way. How do they survive, even in worldwide competition with foreign universities?"

But he says universities are changing their methods very slowly. "We need other policy tools to put some pressure on and stimulate universities to follow our policies, to compete with foreign universities. One of several policy tools is attracting foreign universities."

The most important instrument for this is the Songdo Global University Campus, built near Seoul specifically to attract foreign providers - several have already signed up (see box below).

But that high-profile project is only one way in which overseas links are being built.

In October, the British Council in Seoul hosted pro vice-chancellors and heads of department from five UK institutions - the universities of Bangor, St Andrews, Southampton and Warwick, and the Royal College of Art - interested in building links with South Korean universities. And the British Council's annual exhibition in Seoul, also in October, was attended by colleges and universities seeking to attract South Korean students.

Koo says the government wants to see a shift "from just nationally focused education into globally focused education".

There is a relaxed attitude to some domestic universities' survival as the birth rate drops and institutions compete over a shrinking pool of students. Some universities are "angry about our policy", Koo says, particularly small institutions in the rural south that struggle to attract students.

The ministry also runs the World Class University project, a recruitment programme that attracts leading overseas scientists to work in South Korean universities. It is administered by the National Research Foundation (NRF), the country's research funding body.

Yongmo Lee, director of the NRF directorate for international affairs and professor of public administration at Konkuk University, says the project's aim is to improve South Korea's research performance and change the balance of its science.

"For the past 30 years, we have focused on industrialised science just because (we needed) to move forward, to grow fast...not on the basic science," he says. "But if we have reached a certain level of economic development for the past few years, then we need to move to fundamental research from industrialised or applied research."

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He believes South Korea's university rankings are a key driver in internationalisation as the number of overseas staff is one of the ranking criteria. This means universities are keen to take on the best academics from abroad.

The World Class University project offers healthy salaries to leading scientists, tempting them to spend a semester a year at a South Korean university.

"This gives a great opportunity for Korean professors and students to interact with world-class academics in their field," Lee says.

John Wood is a British academic on the World Class University project. He is a professor of molecular neurobiology at University College London, but spends one semester a year as a visiting professor at Seoul National.

"I have to say I was well and truly crushed when I went there," Wood says. "I was feeling pretty cocky and sure of myself. Then I saw the quality of the people and publications. One woman had four papers in Cell last year - most people get one in their career if they're lucky. The quality of the people is spectacular."

He adds: "Certainly in the UK, we see very few bright young Korean academics. That colours the perception. I had no idea how good it was until I went over there."

Wood researches the pain neurons that respond to tissue damage, mapping the gene responsible for some people feeling pain less strongly or not at all.

He says the link with Seoul National has been "very much a two-way street", with joint publishing of papers and "a lot of collaboration in areas we were not working on here in London, which is really beneficial for UCL".

Asked about differences in the academic culture, Wood mentions the deference to senior figures shown by the postgraduates he teaches. They can burst into applause after lectures, which Wood says is "unheard of" in the UK.

He adds: "Probably the biggest difference between science in South Korea and science in the UK is that the students would never disagree with you. That is something we have to encourage. Students need to be more pushy and critical of their elders. There are potential dangers in that very structured system."

An Economist Intelligence Unit report on South Korean ÖйúAƬ for the British Council notes: "It is argued that, as in Japan, South Korean ÖйúAƬ places too much emphasis on rote learning and multiple-choice tests, to which answers are either right or wrong."

This fails to develop students' analytical skills and intellectual independence, it adds.

Ewha Women's University's Byoung-Joo Kim also warns that South Korea's exam-driven society brings limitations.

"The 'right answer' society prevents Koreans from speaking up and starting discussions that could come up with better ideas...That preoccupation with right answers prevents us from achieving greater creativity."

For it is not that the country lacks creativity - South Korea's manufacturing boom and economic miracle necessarily involved intense creativity - it just needs freer expression, Kim points out.

Nevertheless, Wood says, the work ethic and enthusiasm of the students makes teaching in South Korea "a really joyful experience" and the students exhibit a "thirst for education".

The impact of the World Class University programme will not be properly seen for five or 10 years, he says, although the metrics on joint publication are already good. It will take that long for the Korean postdoctoral researchers now working under overseas academics to "become these more critical faculty members".

Beyond that project, mutually beneficial links between universities in the UK and South Korea are already flourishing.

Imperial College London, the University of Cambridge, Chungbuk National University and Hankyong National University are involved in a microfluidics group that has received ?2.25 million in funding from the South Korean government.

According to Dominic McAllister, head of science and innovation at the British Embassy in Seoul, many universities are interested in the potential for the commercialisation of research, a course of action well supported by the South Korean government.

Andre Geim, winner of the Nobel Prize for Physics for his research on graphene at the University of Manchester, also works in South Korea. The Samsung Advanced Institute of Technology is interested in developing graphene - a one-atom-thick material - for touchscreens on televisions or mobile phones, as is Sungkyunkwan University.

"They (the South Koreans) are already world leaders in these graphene technologies," says McAllister. "Partnering with them, as Manchester has done, is a very wise move. Korea doesn't sit around when it decides to do something. It invests huge amounts of money into it. You can guarantee that the quality of research is going to rise rapidly in those areas. Being there at the beginning is a very good move."

UK universities interested in links with South Korea need to develop "a real two-way relationship" rather than focusing solely on recruiting Korean students, argues Davies, of the British Council.

When speaking to representatives of South Korean universities, there seems to be a common perception that British institutions are too concerned with the financial rewards of attracting foreign students.

"South Korea is a society that has traditionally looked to the US. Raising the profile (of the UK) is a challenge," Davies says.

The British Council has been encouraging South Korean students in the UK to blog about their experiences, making use of the Asian nation's vibrant online world.

In contrast, getting traditionally immobile British students out to South Korea can be difficult. South Korea is "simply not well understood in the UK", Davies says. But "once they are out here, they love it".

The commitment of its students, the aspirations towards internationalisation and the strength in science all add up to an impressive package for South Korean ÖйúAƬ. But what about the criticisms of the sector, concerning "over-investment" resulting from ÖйúAƬ's key social role.

Byoung-Joo Kim says that "still deeply embedded in the public mind is that the school name determines your success in the future. Ever since first grade, I was told that once you enter Seoul National University you are set for life. I realised that's not the case."

But changes to the system will not necessarily solve this problem. On the contrary, some worry about even greater social stratification.

According to Byoung-Joo Kim, there has been resistance to the introduction of admissions officers in universities and the replacement of the entrance exam system. This stems from the belief that taking into account interviews, extracurricular activities and communication skills means that "children from richer families would do better".

Byoung-Joo Kim calls for a more nuanced system of assessing individuals, going beyond just exams both in universities and employment, but concedes that "if your top priority is social class, that might not work".

One problem he stresses is the high cost families pay for the intense preoccupation with education. It is common for parents to decide, given the cost of education, that they cannot afford to have a second child, Kim says. He sees this as a contributing factor in South Korea's declining birth rate.

"This pressure to compete, aspiration to become number one, has served Korea very positively so far in education," he says. "But the selection system and high cost of education are side-effects of this abnormally strong aspiration in education. It has acted to reduce the size of the population. You're so ambitious that you're reducing the size of your population. It sounds crazy, but that's what happening."

In 23 Things They Don't Tell You about Capitalism, South Korea-born Chang offers a critique of education in his home nation. In a chapter titled "More education in itself is not going to make a country richer", he takes issue with "the common myth that education was the key to the East Asian miracle".

Chang argues that "an unhealthy dynamic has been established for ÖйúAƬ in many high-income and upper-middle-income countries". Once enrolment reaches a certain rate, "people have to go to university in order to get a decent job" - even though most jobs do not require specialist training in ÖйúAƬ.

The case of Switzerland shows that high national productivity can be achieved with low university enrolment, Chang suggests. However, rich nations such as the US and South Korea waste resources on ÖйúAƬ "in the essentially zero-sum game of sorting" - that is, establishing each individual's ranking in the hierarchy of employability.

Chang tells Times ÖйúAƬ that until the 1970s, following the broad equality that arose after the collapse of the Japanese occupation and the Korean War, it probably was true to say that educational opportunities were open to all social classes and that "if you studied hard, you got into a good school".

But this had negative consequences, Chang argues.

"The whole trust in education as a means to genuinely choose between people of different capabilities was born. And then once it became like that, people started over-investing in education," he says. "When everyone accepted that educational performance is really the right measure of your innate capabilities, there is all the interest in the world to help your children to produce better educational achievements. Parents started hiring private tutors and sending them to expensive cramming schools."

Chang notes that in South Korea, the "degree to which you can place people according to which department in which university they studied is quite surprising.

"In this system, you have the maximum incentive to do whatever you can to help your kid to get the right marks, the right department in the right university - after that you almost guarantee your child's future...Basically, you're spending too much money sorting between different people rather than improving them with better knowledge."

Can the situation in South Korea change? In his book, Chang argues that "what really matters in the determination of national prosperity is not the educational levels of individuals but the nation's ability to organise individuals into enterprises with high productivity".

Chang says the situation "does change over time but you need a lot of effort. You can't just decide tomorrow not to discriminate against people from lesser universities."

A diminishing of the attachment to ÖйúAƬ would also require great investment in sources of employment for people not cut out for university, he adds.

None of which should obscure the fact that there is great diversity and vibrancy in South Korea's universities. Around Hongik University, a private institution known for arts and design, you will find a thriving nightlife. The streets bustle with students, a fair smattering of Westerners among them, as well as art galleries, coffee shops, bars and clubs. In a small park, an enthusiastic group of wild-haired male and female students on vocals, guitars and drums is belting out an impromptu gig - mixing in everything from James Brown to 1990s dance - to a whooping audience.

At Yonsei, an elite private institution in Seoul, the ivy-covered halls suggest a desire to emulate the US Ivy League.

The university is to open an extension at Songdo, housing new facilities for IT, energy, nanotechnology, pre-medical studies and a school of pharmacy. The branch is intended to promote interdisciplinarity and is deliberately situated close to Incheon airport to attract international academics. It is a bid to "put ourselves on the global education map", the UK pro vice-chancellors are told at a round-table meeting.

Alongside the soaring enrolment rate and thirst for ÖйúAƬ, the desire to compete internationally is a defining characteristic of South Korea's universities.

Asked why the nation's institutions are so keen to win global recognition, Byoung-Joo Kim describes that as a "strange question to a Korean".

"We're used to moving up continually," he says. "From the poorest country in 1950, to one of the top 10 economies now - we only know the way up. We always want to be the top. It's embedded in our culture: the competition, the competitiveness."