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Rapid development of information and technology in this globalization era has driven the transition of world economy, from previously labor and market economy to knowledge economy. Nation-states’ global competitiveness is measured partly by the number of highly educated people within its society. By becoming “world-class”, universities are believed to play an important role to boost a country’s competitiveness level. This paper discusses the internationalization of higher education as one of important instruments in achieving the goal to create knowledge-based economy. This study identifies the internationalization initiatives of the Indonesian and South Korean governments from national level, and universities from institutional level. The objective of taking South Korea as comparison to Indonesia is because both countries are middle power and non-English speaking Asian countries, which started their internationalization in early 2000s with the same aspirations: higher education reform towards knowledge economy. The results show that both Indonesia and South Korea have a state-led internationalization, with more advance development and achievement in South Korean case. In the case of Indonesia, Indonesia still faces challenges such as the competitive regional arrangement in ASEAN; the dilemma between quantitative targets and quality assurance of internationalization initiatives such as international publication, patents, and international students; also the challenge to create more detail programs and strategies other than just financial supports from government to widen up the other aspects of internationalization efforts. However, with the internationalization agenda rising in many countries, Indonesia has the opportunity to take a lesson from other countries’ experiences, including from South Korea.     Keywords: internationalization, higher education, knowledge economy, Indonesia, South Korea

Towards Knowledge Economy: A Comparative Study of Indonesian and South Korean Internationalization of Higher Education