Aristotle’s famous saying, “All who have meditated on the art of governing mankind have been convinced that the fate of empires depends on the education of youth,” has been the foundation of educational philosophy among modern universities for centuries.

But today, Japanese universities are facing increasing demands from politicians and business leaders to produce graduates with the practical skills needed to compete in the growing Asia-Pacific region.

Yet they also face larger challenges, from securing research budgets for cutting edge technology and attracting top students and faculty, to increasing the number of foreign exchange students.

To address these challenges by expanding their ties with foreign academic institutions as well as boost cooperation on big issues like climate change, 45 of the top research universities in 16 countries have formed the Association of Pacific Rim Universities. The group, led by Dr. Max Nikias, who is also the president of the University of Southern California, met Monday in Osaka.

USC has a long-standing relationship with Japan. It was founded in 1880, and a Japanese national graduated from the university’s college of medicine only nine years later. By 1910, there was a Japanese Student Association. As of last year, 41 undergraduate and 111 graduate students from Japan were enrolled at the school.

Prime Minister Takeo Miki studied at USC in the 1930s. Current Prime Minister Shinzo Abe studied at the USC School of Policy, Planning and Development, and took English-language courses there in 1978. He also visited USC on his recent trip to the U.S.

But getting Japanese university students interested in study abroad programs, in the U.S. especially, is becoming more difficult. The latest figures from the Institute of International Education show Japan now ranks seventh for international students in the U.S. There were 19,334 Japanese students in total, including 9,155 undergraduate, 3,562 graduate and 5,159 non-degree students, in America last year. That’s less than Taiwan’s 21,266 students, even though Taiwan’s population is barely one-fifth of Japan’s.

Yet there are also larger, more fundamental changes in the structure of universities throughout the world today that will shape their future. In Asia, universities are concerned about attracting students at a time when many countries face elderly populations. This means online learning is becoming more important and it’s an area that Nikias and USC have long advocated.

“Online education offers opportunities, especially to an aging population where older people want to return to school,” Nikias said in an interview with The Japan Times on Sunday, prior to the group’s meeting. “For online learning, USC is only offering professional masters’ programs, executive education, and a few courses in continuing education. Admission standards are rigorous, but students don’t have to attend classes on campus.”

Japanese university administrators, as well as politicians and business leaders, have been trekking to USC and Stanford University, and to the Silicon Valley region, for years, anxious to re-create their intellectual, creative and entrepreneurial atmosphere in Japanese universities. These hopes are often dashed, however, upon returning home.

“To create other versions of Silicon Valley, say, you can’t copy it exactly. You have to do it within your own culture. But there are some basic ingredients for success: human capital, an entrepreneurial environment, and talented artists and designers. At USC, we’ve established the ‘new MBA,’ which is a program where the creative arts, technology and business come together,” Nikias said.

He added that biotechnology, digital media and alternative energy studies are all expected to grow rapidly in the coming years. The natural or social sciences, which can help deal with aging populations, are also expected to grow.

While universities have to evolve with the times, Nikias said it would be a mistake to try to run them as a business, as many universities — especially those in Asia that may be strapped for cash and facing a decline in younger students — are trying to do today.

“The modern university is the brainchild of the Renaissance movement. Universities today clearly outlive governments. They outlive corporations, which come and go, merge, file for bankruptcy, etc. Universities may also outlive nations,” he said.

“So, as a university you want to be, on the one hand, very efficient, very entrepreneurial, and be like corporations in certain ways. But if you try to become a subsidiary of a corporation or carbon copy the operations of a corporation, then I’d question whether you can survive in the long run,” he said.