Hamish McRae: We may worry about standards, but British education works best for the modern world

We have a higher education that gets young people faster into the job market than any other country

Education, education, education - those were our Prime Minister's stated three highest priorities when he took office in 1997, and it is hard to quarrel with that as a policy objective. How you carry out the policy is another matter.

This week, the great A-level results week, has unsurprisingly seen the usual flurry of concern about the A-level exam system, with a two-pronged attack. On the one hand, they are criticised for being too narrow and elitist. On the other, the charge is that they have been dumbed-down by grade inflation.

The week has also seen the publication of the global university rankings by the Shanghai Jiao Tong University, the most thorough of the world rankings. This was the source that Tony Blair used when he told the European Parliament in May that there were only two European universities in the world's top 20. Had he been really direct, he could have pointed out that there were no continental universities in the top 20 - just two British ones, Cambridge and Oxford.

The first matter, the wisdom of keeping A-levels, has attracted huge publicity; the second, the performance of our universities, virtually none. You can understand why, for a lot of students are getting their results on Thursday. Yet on any broad assessment of our international prowess in education, surely the latter is the more important.

The English A-level system is unusual by world standards. We specialise much earlier and, as a result, are able to get people through university in three years instead of four. Scotland and Ireland stick to the global norm of a more general final school exam and a four-year undergraduate course.

As a rule, being the oddity in global systems puts a country at a disadvantage. In this case, however, there is a mass of evidence that our system is better. Our drop-out rate is low and falling, despite the increase in numbers at universities. The value of a degree in terms of benefit to user is the highest in Europe. Students in the UK are more satisfied by their university experience than in any other European country. And we are second only to the US in attracting foreign students, with nearly 250,000 of them.

It is fair to ask whether this is sustainable, given the squeeze on university funding. But at the moment, in terms of both efficiency and customer satisfaction, we are doing very well.

This is supported in fair measure by the Shanghai rankings. Cambridge is now number two in the world, second only to Harvard and up from third last year and fifth in 2003. Oxford is under pressure, clinging on to its place in the premier league at number 10, down from eighth in 2004. Imperial and UCL are still in the 20s, and I was pleased to see Edinburgh now in the top 50 at 47. Now that Manchester has merged with Umist, it too has pulled up and now is at 53, while Bristol is just behind at 64.

As always, the list is dominated by US universities and by the English language. But the latter advantage is being chipped away. Continental European universities are moving towards teaching in English for their post-graduate and business courses. This shift parallels the movement in Britain for students to shift from learning foreign languages towards learning other subjects that they feel will have more practical career value.

For native English speakers, the value of learning a foreign language is increasingly seen as bringing cultural and social benefits, rather than economic ones. For a non-English speaker the choice of a foreign language is a no-brainer, whereas for an English speaker it is hard to judge which languages will be the ones to go for in 20 or 30 years' time.

This leads to a more general point. Future economic success, even survival, depends on pushing the skills of our workforce upmarket. It is indeed a matter of education, education, education. In the US over the past 20 years, by far the largest growth of new jobs has come in the top 10 per cent of the skill range. Technology has meant that skilled people on the other side of the world can do the high-tech jobs that a decade ago were done here. But this leads to a conundrum: how do we train people to do the new jobs when we don't know what those jobs will be?

The general response, of course, is that universities teach people how to learn. I would add that the combination of A-levels and the tight three-year undergraduate course is very well suited to this brave new world. It is one where we don't know what we will need to know but will have to be intellectually very nimble at picking up new skills and making sound judgements on the basis of inadequate information.

Why is this? Well, I have not seen any research, so what follows is hunch. But it seems that we have by accident stumbled on pretty much the right form of higher education for this new age of information and entrepreneurship. You want people who can study a new and unfamiliar subject swiftly and at a high level, which is what A-levels require young people to do. The Oxbridge tutorial system pushes people into testing arguments and defending judgements.

All right, you might say that this is learning to fake it at a high level, but I heard the opposite criticism of students in Beijing when I spoke with a Chinese economics professor who had just returned from teaching in the UK. The worst thing about his students, he said, was that they would not argue: they just wanted to get the answers right to get good grades. In economics, as in so many subjects, there is no right answer and what matters is not making serious mistakes by clinging to outdated theory.

Then, at a post-graduate level we have the excellent one-year taught masters, a degree that if European universities have their way will not be recognised as equivalent to their more ponderous masters degrees that take two years and sometimes more.

Finally, we have a higher education system that gets young university-educated people faster into the job market than any other country on earth, even if they take a gap year on the way. This dovetails with a job market that pushes responsibility on to them more swiftly than anywhere else. That is a grand competitive advantage, and the reason why so many young people from all over the world want to work for a spell in the UK.

Having said all this, it would be absurd not to acknowledge that there are serious concerns. Our universities need more money. They need to widen access, not by shutting out good students who don't tick the Government's access boxes, but by increasing places. That needs investment in the universities and it needs detailed work by the schools to make bright students aware of the opportunities as these develop. The universities have to increase salaries of their best researchers and - important - teachers too.

But while acknowledging these concerns, let's also appreciate the fact that the UK gets the silver in the world higher education Olympics. No room for complacency, but we must be doing something right.