Andrew Oswald: Prepare for the American invasion

One day soon, America will pillage Britain. We will fight them on the beaches. We will fight them on the hills. And then we will surrender. It is only a matter of time before United States universities set up shop in our country. These invaders will set high fees, pull in the best British students, and become a super-elite that ranks way above the existing best. Unlike their British counterparts, the wealth and entrepreneurialism of the incomers will allow them to act in ways unthinkable to universities that are hundreds of years older.

One day soon, America will pillage Britain. We will fight them on the beaches. We will fight them on the hills. And then we will surrender. It is only a matter of time before United States universities set up shop in our country. These invaders will set high fees, pull in the best British students, and become a super-elite that ranks way above the existing best. Unlike their British counterparts, the wealth and entrepreneurialism of the incomers will allow them to act in ways unthinkable to universities that are hundreds of years older.

Crucially, the newcomers will offer generous scholarships to our cleverest students from hard-up backgrounds. They will do this by transferring part of the cash paid up - cheerfully - by British students coming from well-off British homes. The Government may mutter on the Today Programme about this invasion of the school-body snatchers. But, because of the new international GATS agreement on trade and services, they will be unable to do anything about it.

Imagine it is 2007 and you are an exceptionally talented 18-year-old. Harvard, Princeton and Dartmouth are all setting up outpost universities in this country, and they offer you a scholarship of £10,000 a year to be an undergraduate with them. You would be mad to turn it down. Regardless of the bursary incentive, we live in a world where global brand names will assume greater and greater importance.

Labels sell. In education, like clothing, the rise of the mass media and the globalisation of the English language mean that a top US university degree will, by the middle of this century, make a person even more marketable than it does today.

How will British universities react when the Americans arrive? By our standards they will be overpaid as well as over here. So these invading armies will find it quite easy to attract the best faculty from their lower-paying British university competitors. That, in turn, will encourage applications from the best of the British high-school students. In this way, a super-elite will spring up.

As my Warwick colleague Amanda Goodall has persuasively argued, this will be good for our nation, in the long run, even though there will initially be a painful scratching of souls. Import competition is an excellent thing.

Take the car industry. I last drove a Mini in 1983. Mine was fun but noisy and cramped. I switched to a much better car made abroad. Today, however, I might consider buying a Mini again. The new version is reputedly great. Why? Because it is now produced by the German carmaker BMW.

Much the same is true of Jaguar. Quality was weak for long periods while it was a British-made product. Then Ford, an American company, took it over. Jaguars improved enormously.

We are going to see the same happen in the manufacture of minds. Imports from the US are going to change our marketplace and, ultimately, by offering something better to consumers, force us to improve the quality of our own products. Thank goodness for foreign competition, is my view. It will knock sense into the weird market for British higher education.

None of this talk figured in the fees debate. But, being honest, who cares that much whether we get £3,000 a year or £1,000 a year? On a global stage, both figures are loose change.

Those grumpy voting politicians fought about whether Britain was going to get the money to produce a third-rate product or a second-rate product. Almost nobody in the public debate said: wake up, the American universities are charging the equivalent of £15,000 a year, and that means we are going to get fried as effectively as any snowball rolling into Hades.

Where does this leave our top universities, including those who want to form a so-called G5 LondonOxbridge grouping? Struggling and out-gunned, that's where.

I welcome the coming invasion: it will bring pizzazz as well as quality. I still enjoy driving an imported car. It was made in Sweden. By Vikings.

The writer is professor of economics at the University of Warwick

education@independent.co.uk