Patten is a former commissioner for external relations for the European Union and the last British governor of Hong Kong. He told the World University Presidents Summit in Bangkok balancing social, cultural and educational needs, amid rapidly changing national and global forces, posed a challenge for educators worldwide.

Patten delivered the keynote speech to the gathering of more than 1,000 education ministers, college presidents, rectors and other high-ranking education officials from 80 countries at the Queen Sirikit National Convention Centre.

He said the purpose of higher education - in addition to the traditional goals of teaching and researching - now includes economic development, because education helps create the skills and jobs needed to propel growth.

In today's globalised economy, he said, a country's economic success depends largely on its citizens' education and knowledge. But spending more on education did not automatically guarantee a higher GDP growth.

Currently, the US is among the world's biggest spenders on education with 2.6 per cent of its GDP spent on education. For European countries, the average sum spent is about 1.1 per cent of GDP.

Patten said taxation paid for just under half the money US spent on education (1.2 per cent of GDP), while the remaining amount (1.4 per cent of GDP) was covered by students' fees and outsiders' contributions, especially the huge endowments of well-known universities.

Only a few UK universities, such as Oxford and Cambridge, enjoyed sizeable endowments contributed by businesses and former students, he said.

The Oxford and Newcastle chancellor suggested that countries may also consider levying a graduate tax on students who have finished their higher education and secured a job with an income that justifies paying an extra tax to help finance educational services.

Prof Pavich Tongroach, secretary-general of Thailand's Higher Education Commission, and an organiser of the summit, said the demand for educational services had risen sharply in the past few decades.

Pavich said higher education was previously just for the elite in society, so the demand was rather small and the state could cover most of the funding. Now, the number of secondary students pursuing some form of higher education in Thailand is nearly 50 per cent, compared to just 10-20 per cent a few decades ago.

" One of the major consequences is that the public faces increasing pressure to finance the education of a growing number of students. The cost of education, especially in the science and technology fields, is now very expensive.

"In other words, education is becoming less and less a state benefit. This means students will have to pay more fees as education services become more market-oriented, as is now the case for private universities in Thailand," Pavich said.