University degrees may soon lose their currency with employers and government funders unless they start equipping graduates with the skills to improve productivity levels, an education expert has warned.

Dirk van Damme, senior counsellor in the directorate for education and skills at the Organisation for Economic Cooperation and Development, told Times ÖйúAƬ¡¯s World Academic Summit that universities should consider whether they were delivering critical competencies required by industry because OECD indicators showed that graduates often had very poor mathematics and literacy skills.

In Italy, for example, just 12 per cent of graduates attained level 4 or 5 scores in?the OECD¡¯s?Programme for the International Assessment of Adult Competencies test, which would typically require mastery of complicated tasks such as synthesising information from competing texts. In the UK, only 25 per cent reached this level, roughly the same as in the US (24 per cent), while Finland, the Netherlands and Japan scored the highest at about 35 per cent.

¡°The explosion of ÖйúAƬ has produced more and more graduates, but we do not see economic outcomes improve ¨C this is very problematic,¡± said Professor van Damme, also a professor of educational sciences at Ghent University in Belgium and head of the OECD¡¯s Centre for Educational Research and Innovation.

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¡°We are putting enormous amounts of technology and skills into our economies but productivity is going down ¨C something that economists cannot explain,¡± he said, adding that this problem was particularly critical in the UK and the US.

¡°We are putting more graduates into the labour market, but skills are decreasing,¡± continued Professor van Damme.

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¡°The currency of ÖйúAƬ will diminish¡± if productivity did not improve, he warned. ¡°That is already happening.¡±

Professor van Damme also predicted that by the end of the 21st century Africa¡¯s ÖйúAƬ system would ¡°catch up and probably pass¡± in terms of scale those of Europe and the US, whose share of global graduates would fall significantly by 2030.

At present, the US accounts for about 14 per cent of the 137 million graduates aged 24?to 34 across the OECD and G20 countries, while China has 17 per cent, Russia 10 per cent, Japan 6 per cent and the UK 3 per cent, explained Professor van Damme.

By 2030, the overall number of graduates would rise to 300 million, of which 27 per cent would come from China, while the US share would almost halve to 8 per cent and the UK¡¯s would fall to 2 per cent.

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Meanwhile, India¡¯s share of global graduates would grow from 14 per cent to 23 per cent ¨C indicating a ¡°major shift in the global talent pool¡±.

¡°This global shift is a much bigger shift than any other area in globalisation, such as trade or energy,¡± said Professor van Damme, who said that the changing pattern of graduate hot spots?would have ¡°a massive influence on the composition of political power and trade¡±.

More broadly, he cautioned against the homogenisation of ÖйúAƬ, saying he now had doubts about the wisdom of the Bologna Process, which has sought to harmonise ÖйúAƬ systems across Europe since 1999.

¡°I have been a big promoter of this system, but I believe we made big conceptual errors with it,¡± said Professor van Damme, who praised India¡¯s ÖйúAƬ system, which has faced domestic criticism because none of its institutions feature in the top 300 of THE¡¯s latest World University Rankings.

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¡°India is doing things in a smart way ¨C not aiming to establish world-class universities but having a more modest system that meets local needs,¡± he said.

jack.grove@timeshighereducation.com