Below is an edited exerpt from Prime Minister Lee Hsien Loong's speech at Cambridge University's 800th anniversary gala dinner. » Read article

» Many opportunities for grads who return home

Cambridge originated in the 13th century. It started with the expulsion of foreigners from the University of Paris in 1167 which caused many English scholars to return from France and settle in Oxford. In 1209, there was a dispute with townsfolk in Oxford; some scholars left Oxford and formed Cambridge - and that's why we are here today. There have been many ups and downs over the centuries but today, Cambridge is a vibrant and forward-looking institution.

For centuries, Oxford and Cambridge were the only two universities in England and they became key institutions producing leaders for the Church, the country and in the sciences and arts. It produced clergymen and ministers, writers and poets, scientists and philosophers - many great names through the centuries.

In the 19th and 20th centuries as the British Empire rose, Cambridge was at the centre of this empire and talent came to Cambridge from all over the world: physicist Ernest Rutherford from New Zealand, mathematician Srinivasa Ramanujan from India, and also many brilliant refugees from Europe between the two world wars fleeing the Nazis, like the philosopher Ludwig Wittgenstein from Austria.

But while Cambridge men took active part in national life, the university itself remained in splendid isolation. It's some distance outside of London in the middle of the fenlands, once upon a time swampland but now drained, and the way it was put, people or students came 'up' to Cambridge and went 'down' to London. That was the order of things.

Even Cambridge town was outside the cocoon of the university, and hence the distinction between 'town' and 'gown' and the frictions between the two.

Hence also the sardonic graffiti which has since been preserved on a lamp post in the middle of Parker's Piece that said 'Reality Checkpoint'. This marked the boundary between the university area and the real world of non-academic locals living in Cambridge town beyond Parker's Piece. The Reality Checkpoint was a reminder to those going past: Please verify your notions of reality as you go into the outside world.

Today, the world has changed. Britain's great empire is just a memory. The United States is today the economic powerhouse of the world. The best US universities like Harvard or Stanford or Yale or MIT (Massachusetts Institute of Technology) have become outstanding centres of teaching and research and the top Ivy League universities are at least on a par with Cambridge.

They operate on a different model. They are more integrated into the economy and society, they are more closely linked with their alumni networks, they are more independent of the US government in terms of funding and governance and they have larger endowments, eclipsing even the wealthiest Cambridge colleges.

Most importantly, they have attracted talent - both students and professors - from around the world and established formidable reputations for themselves.

And on the other side of the world, Asia is emerging. China and India are educating large numbers of talented and driven young people, and their best institutions like the IITs (Indian Institutes of Technology) in India or Beijing and Qinghua universities in China have admission competition that's fiercer than anything which Cambridge and MIT experience.

The Indians say that if you have a bright kid, try for the IIT; if you can't make it, go to MIT. The Chinese don't say anything, but if you look at their population - 1,300 million - and you look at the admission to, let's say, Beijing University, maybe 3,000 a year, and you scale that to Singapore and the National University of Singapore, we would have maybe 10 admissions per year.

So they have the talent and the potential. They have not yet established themselves as premier institutions in international comparisons, but they will improve over time as India and China develop and open up, and they will reflect the vibrancy and dynamism of their economies and societies.

Cambridge remains a great university, but it now shares top placing not with one or two others but perhaps half a dozen, so far mainly in North America.

In response to these changing times, Cambridge is also evolving. It's not easy, given the accumulated weight of 800 years of tradition and a system of colleges with substantial autonomy, if not a preference, to go it their own way.

But they are changing. They have a Judge Business School - they no longer consider business to be something which is beneath one's dignity, but something which has to be mastered. They operate a very successful Science Park to exploit the ideas and breakthroughs that Cambridge academics generate.

They collaborate with industry in research. For example, Microsoft Research Cambridge has been set up together with Microsoft.

They encourage dons to be entrepreneurial and to take on consultancies, and you can do as much as you like as long as you fulfil your academic duties to your students and your faculty.

And they're becoming more international, taking on many foreign students from the European Union and the rest of the world.

They are involving the alumni in their activities more. The Cam - the university's magazine for alumni - will from time to time make an appeal for funds. This 800th anniversary is a very significant occasion for the university to raise funds.

But Cambridge remains a British institution subject to Britain's social and political climate. It's heavily dependent on state funding; the fees that it can charge are capped. If it were not subject to government caps, it could charge a lot more.

It's also under pressure to become more inclusive and to admit more students from state schools who may come from disadvantaged backgrounds.

Singapore has had a long relationship with Cambridge, going back to before World War II and probably before World War I. We've had students sent there almost every year, beginning with one or two a year, but now about 30 or 40 a year. On a per capita basis we must send the highest number to Cambridge of nearly any country in the world.

Next: Changing times