Published daily by the Lowy Institute

The case for universities as Australia’s soft power engine

Education is Australia’s fourth-largest export and a tool of statecraft yet is so often undervalued in public debates.

The strength of its higher education is one of Australia’s comparative advantages (Getty Images)
The strength of its higher education is one of Australia’s comparative advantages (Getty Images)
Published 23 Feb 2026   Follow @MConleytyler

Compared with the scepticism in Western countries, education is clearly valued in many places as a path to economic prosperity at individual, family, community and society levels.

In Southeast Asia and the Pacific, for example, Australian universities are prized because of the opportunities they open in people’s lives.

In national policy, education is seen as part of the battle for the 21st century, with countries trying to build their education sectors as a strategic tool for state competitiveness. Yet among Australians such enthusiasm is often lacking. A current of antagonism flows from both the right and the left. At times it feels that the sector is under constant attack.

A new report tells a different story about education as a national asset that helps Australia achieve its international aims. It shows how universities contribute to the foundations of Australia’s national power – in terms of skills, productivity and informed citizens – and as a tool for defence, diplomacy and international development.

Australia’s education sector has lacked the narrative power of other major sectors in the country. Despite employing a fraction of the people that education does, both mining and agriculture have become closely tied to Australia’s national identity.

When minister for education John Dawkins joked in 1988 that the Australian economy might one day ride on the mortarboard rather than the sheep’s back, he turned out to be right. Education is Australia’s largest services export and fourth-largest export overall. But it is rare to hear anyone speaking positively about the international entrepreneurialism of our universities.

Universities suffer for the gap between the nation’s aspirations for higher education and its willingness to pay for them.

For a country with a relatively small population, Australia has a remarkable number of universities ranked in the Top 100 globally. Australian universities have strong reputations and deep expertise. But they are struggling to articulate their social licence and value proposition.

There is a story to tell about the way education contributes to Australia’s capabilities and how it projects itself internationally.

At a domestic level, education is the foundation of human capital and informed citizens – which is ultimately what creates prosperity and confers advantage. Australia’s universities are repositories of knowledge vital to the country’s interests – and an essential ingredient in Australia’s ability to rise to the challenge of the global innovation revolution. Universities are critical to Australia’s response to significant challenges, whether that be pandemics or climate change.

Internationally, much of Australia’s engagement with the world is happening through its education sector. For example, the University of Melbourne’s global engagement through a dynamic network of strategic partnerships and collaborations contributes to Australia’s diplomatic and economic relations.

There are many case studies across development, diplomacy, trade and defence.

Universities are helping solve development problems, for example the World Mosquito Program led by Monash University. It works by introducing a naturally occurring bacteria into carrier mosquitoes so they can no longer pass on diseases such as dengue, Zika, chikungunya and yellow fever.

Another example is the University of New England and Australian Centre for International Agricultural Research program IndoBeef which is improving the livelihoods of smallholders in Indonesia.

University education and research also contribute to diplomacy and trade. For example, the Australian National University liaison office within the Australian Embassy in Washington DC has a remit to represent “team Australia”, working closely with the embassy to strengthen partnerships with universities, government, think-tanks, industry and alumni.

Another example is RMIT’s 25 years in Vietnam including campusesin Ho Chi Minh City, Hanoi and Danang. RMIT also works with government and industry to support Australia’s bilateral and regional priorities, including through the RMIT Asia Hub and Australia Vietnam Policy Institute.

In the Pacific, the Australian Academy of Science supports scientific collaboration and capability-building, including through a mentoring program linking Pacific researchers with Australian counterparts. Australia provides technical and vocational education through initiatives such as the Australia Pacific Training Coalition.

Finally, education contributes to Australia’s defence and security, such as through the Oceania Cyber Security Centre, jointly owned by eight Victorian universities, that builds cybersecurity capacity and resilience across the region. Or the work of the Burnet Institute and many others in health security.

These education collaborations are highly valued by countries that Australia cares about. As a middle power, relationships are vital to Australia’s statecraft, and the education sector is the conduit for this relationship-building.

So why is there so much anger and contempt towards universities?

Perhaps when Australians think about the international role of universities, this can be conflated with issues around international students – rather than the whole range of education engagement. Universities suffer for the gap between the nation’s aspirations for higher education and its willingness to pay for them. With stagnating rates of public funding for Australia’s universities, international student fees have filled the shortfall, and this has become the focus in the conversation around international engagement.

A narrative about the value of universities to Australian society needs to renew a shared understanding that the education sector exists for the public good. Australia’s universities from inception were conceived by governments and directed to serve state and society. Understanding education as a tool of statecraft helps forefront this role.

Australia needs to think seriously about its unique selling point in a fast-changing world. Australia cannot compete on military strength or economic might. The strength of its higher education is one of Australia’s comparative advantages.

Resource extraction may continue to make Australia wealthy, but it is through education that the country can be wise.




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