The talk of a certain stratum of society in Berlin these days is the German government's plan to designate a handful of universities "elite" and supplement their budgets with an extra $60 million each annually -- the equivalent of something like $1 billion in endowment funds, enough for each to hire a couple dozen new professors.

After months of anticipation, education minister Edelgard Bulmahn last week announced the terms of the competition. A preliminary competition is to identify a short-list of ten universities by the end of 2006, the number to be winnowed down to four or five or six winners in a second round, the process to be repeated after five years.

The measure faces emotional opposition in a nation where higher education is financed almost entirely by the government, pretty much evenly-distributed across the landscape, and, to individuals, free.

What's wrong with that? The diagnosis is complicated. From the very beginning, the brightest students fail to congregate in particular places. There are no self-consciously "best" and richest schools competing to attract them, offering the biggest scholarships, the prettiest buildings, the best teaching, the biggest networks of top graduates already in place.

Instead, students arrive at the university of their choice to find that the teaching is indifferent, professors are remote, and junior faculty, mindful of the old often-lengthy post-doc known as the "Habilitation" requirement required as a prelude to an academic appointment, either have not pursued their studies abroad or worse, have done just that and not returned.

Senior faculty concentrate on contributing to the national research consensus (and maintaining their place in the pecking order), rather than trying to map into the global communities of their respective disciplines. The result is a deficit of the kind of opportunity-taking activity that has turned other university towns around the world into hotbeds of job creation.

This is a caricature, obviously. Plenty of bright people do interesting and important things in German universities. But the fact is that the German educational system is far too regimented to succeed in the highly competitive global economy, at least at the higher end.

It may not matter that virtually all schoolchildren in Berlin got their report cards at the end of the morning Friday -- to be quizzed about their grades that afternoon by friendly shopkeepers. It may even be a good thing.

But when senior professors insist -- as nearly 4,000 of them did in a well-publicized petition a couple of years ago -- that scientists and scholars in their early thirties still require the supervision of an older professor under the Habilitation system, it is an invitation to the brain drain that Germany has been suffering in recent years.

Never mind that such issues are dealt with by the German parliament, instead of the universities themselves, actively competing among themselves for the best talent on the global market.

Bulmahn, a political scientist who has been education minister in Gerhard Schroeder's government since 1998, clearly understands the importance of reforms. Moreover, she has the patience to work them from the bottom up.

That's bound to be frustrating in a world in which Harvard University can quietly buy up a few hundred acres in the Boston neighborhood across the Charles River from its main campus and then lay plans for a giant new science park, asking hardly anyone for permission, not rival Massachusetts Institute of Technology down the street, not even the mayor. But that is the world in which Germany is living. No wonder that European pharmaceutical firms are moving their research facilities to Cambridge and not the other way around.

In formally launching a process designed to eventually restore the luster of Germany's most famous brands -- the names of its great research universities -- Edelgard Bulmahn has taken a concrete step. But other nations are not standing still. Last week, too, for example, British Prime Minister Tony Blair secured passage of his Higher Education Bill (with just a vote or two to spare.)

Among others things, Blair's bill permits England's best universities to charge students higher fees, an "elitist" measure designed partly to shore up their financial position, partly to attract the most confident and competent students to the fancier institutions -- a retreat from egalitarian ways that has Buhlman has vowed not to accept.

And therein is the risk. It is possible that German education will respond too little and too late. As MIT's Lester Thurow says, globalization doesn't crush those who resist it. It simply passes them by.