THIS is the trajectory that Singapore wants its young people to be on: higher education leading to higher productivity and higher incomes.

But in an article for the Civil Service College here, two British scholars have questioned if that relationship still holds.

They point to the education explosion that has taken place worldwide, and especially in the emerging economies, where they estimate university enrolment has doubled since the mid-1990s.

In 2009, some 179 million students had access to the same developments in science, technology and business previously reserved for students in Western universities, write Professor Phillip Brown of Cardiff University and Professor Hugh Lauder of the University of Bath.

Between 2004 and 2007, they interviewed 125 companies and 65 policymakers in seven countries - Britain, the United States, Germany, China, India, South Korea and Singapore - to identify trends that would have an impact on education, jobs and incomes in a big way.

The result was a 2012 book titled The Global Auction: The Broken Promises Of Education, Jobs And Incomes.

In it, they warn that the majority of graduates could end up in skilled jobs paying modest wages because of a global oversupply of degree holders.

They add that the global expansion of higher education would be less of a problem for Western societies and countries like Singapore, if emerging economies failed to match the quality standards of the developed economies.

But that is not so.

"The bad news for the developed economies is that the second trend is a quality-cost revolution - resulting in a rapid increase in productivity levels and quality standards, and at lower costs than in the West, following the application of best practice in emerging economies," they write.

Given these trends, it is a no-brainer that profit-maximising, cost-cutting multinational corporations (MNCs) will relocate jobs to where there is skilled labour willing to work for less.

The global auction is in effect a reverse auction, and the skilled workers who submit the lowest bid, win.

In their article for the Civil Service College's publication Globalising Skills: Implications For Singapore, the two British scholars challenge the link that policymakers here have drawn between education, productivity and incomes.

Does it still hold, they ask. And "how can it be sustained in the light of the global auction which is likely to bid down the wages of graduates, with the exception of those considered the most talented"?

The exception refers to the global war for talent that multinational companies will continue to wage. This war is focused on a very thin slice of the graduate population - namely the best and brightest from the world's elite universities.

In the auction at this end of the market, the firm that bids the highest wins the right to hire this top talent.

The two dons thus predict widening income inequalities within middle-class occupations, as the best are treated very differently from the rest.

They recommend that Singapore respond in two ways.

The first concerns talent. Singapore needs to nurture local talent that MNCs will find attractive, and which will help anchor their presence here.

The second concerns nurturing its own small and medium-sized enterprises.

This strategy grants Singapore a degree of economic autonomy within a context of MNCs constantly seeking to cut costs through relocation.

Singapore has been working on this for some time, they note, but in the light of the global auction, "there is greater urgency".