This is what the state can do to create a high-value knowledge based economy. Singapore, which is considered as a state that successfully engineered its economy to the path of sustained economic development by reforming itself into a global commercial hub (obviously, following the unorthodox policies to create the orthodox outcomes), has now drawn up plans to transform itself into a global hub of education and medical services. It has formulated the Global Schoolhouse, a policy (with an initial funding worth US$8 billion) designed to attract top notch international students to Singapore based public and private institutions, remodel education system, and establish high class universities in Singapore. It is reported that elite universities like MIT, Yale, John Hopkins, Duke, etc were funded to run graduate-level programs and research activities. Similar policies were implemented by Saudi Arabia, Romania, Ireland, and Malaysia.
Singapore's government formulated the Global Schoolhouse, a policy platform based on three pillars: investing financial support with an identified group of "world-class universities" to establish operations in Singapore; attracting 150,000 international students by 2015 to study in both private and state-run education institutions; and remodel all levels of Singaporean education. The Global Schoolhouse articulates with policy reforms in education, research, urban redevelopment, taxation, immigration, and intellectual property.
Bringing in foreign expertise to contribute to Singapore's knowledge-economy agenda resonates with earlier state-led industrialization policies. The government's aphorism, "build it and they will come," was translated into the provision of state-of-the-art facilities and tax concessions and grants for foreign companies. This enabled Singapore to build capacity in key industries and integrate itself into the capitalist economy, at a time when the newly independent states were deeply suspicious of capitalism. The prime minister noted that Singaporeans were "learning to do a job" from foreign companies, something they may not have otherwise learned. The issue of "whether or not we were exploited" was less relevant to him.
This is yet another example of how the state can play a crucial role in promoting economic growth, engineer such growth methodologies, and provide incentives to achieve the growth goals.
By the way, this is how the Singaporean government support the education system:
The government offers resources and opportunities to do less administration and more research, including scientifically proactive research unencumbered by short-term commercial imperatives. Expatriate faculty also express appreciation for the professional freedoms provided by a forward-thinking, scientifically literate leadership that prizes intellectual achievements and a setting without any urban violence. Despite the limitations in democratic freedom for its citizenry, Singapore is not considered a police state. It is described as well governed, with impressive public-good achievements in infrastructure, health, education, and redistribution exceeding those of its neighbors.
...Singapore continues to use foreign companies, universities, and knowledge institutions to build capacity in key knowledge industries and to exploit new and emerging expressions of knowledge capitalism.