Summary In many nations government policy and scholarly work have identified the growing role of higher education and research in the world-wide knowledge economy. The role of higher education is not limited to fostering the economic development of nations and providing opportunities for individuals, it extends also to promotion of cultural diversity, political democracy and trade. Emphasis is rightly placed on how higher education can better serve society and promote international cooperation. However, as yet little attention has been given to how higher education and research are active in the processes of globalization, and are themselves being reshaped by globalization with significant ‘feed-back’ effects into nations. Higher education and knowledge are simultaneously global, national and local (Marginson and Rhoades, 2002). Higher education is nested in national government everywhere, and shaped by patterns of social investment. At the same time the cross-border or global dimension of activity is growing, especially in relation to knowledge. By studying the changing global landscape of higher education, we can draw out the implications for the policies of governments and national identity, for the developmental strategies of universities, and for international agencies. The paper maps, summarizes and synthesizes this changing global landscape. It focuses on trends and patterns in the cross-border mobility of students and staff, the growth of educational trade, research publication and research concentrations by nation, ICT-connectivity, language of use, and cross-border policy flows. Most of the interaction between nations in higher education takes the form not of trade but of free exchange and cooperation, i.e. the production of global public goods. The paper draws on (1) recent research for policy papers prepared for the OECD on globalization and higher education, and the internationalization of higher education in the Asia-Pacific region, (2) case studies of leading research universities in eight Asia-Pacific nations, and (3) comparative data from the OECD, UNESCO and the World Bank. While there is a general trend to increased international engagement of higher education, the actual level of engagement, and knowledge economy capacity, vary markedly between nations and regions. One feature of the global knowledge system is the position of the United States, with 54 of the top 100 research universities in the 2007 Shanghai Jiao Tong listing, and almost one third of the world's scientific papers. The USA is a magnet for world-wide talent, enrolling 100,000 foreign doctoral students each year. But a new wave of Asian science powers is emerging in China (including Hong Kong and Taiwan), Singapore and Korea. In China, between 1995 and 2005 the number of scientific papers produced each year multiplied by 4.6 times. In South Korea the ratio was 3.6 times, in Singapore 3.2. From 2003 to 2007 the number of universities from China in the Jiao Tong top 500 rose from 18 to 25, with the mainland universities rising from 8 to 14. Shifts of this magnitude suggest that in world higher education and research a more pluralistic scientific and cultural environment is developing, with some potential also to foster a more pluralistic linguistic exchange. If so, this enhanced diversity would constitute a global public good, providing a greater range of potential solutions to the many problems attending human and environmental conditions.