In this paper we examine the tension between the educational needs of a globalized world and the institutional structures of a globalized education system. The globalized education system encompasses market-driven funding arrangements for both research and teaching in higher education, which depend on international ratings systems structured around traditional discipline areas. The development of these competitive market structures has resulted in the removal by institutions of 'unsuccessful' disciplines, and a risk-averse approach to cross-disciplinary, problem-focused research and curricula. One of the most important consequences of this discipline-based education system is a missed opportunity to encourage reflexive thinking about discipline-based normative assumptions and world views. An advantage of interdisciplinary work is that it casts new light on the practitioner’s own discipline, as well as enabling a critique of assumptions in other disciplines. A reflexive and critical approach to disciplinary knowledge is, we propose, one of the conditions necessary for cultural competence in both researchers and students. Yet just as it is now argued that the globalized world needs graduates who are culturally competent - cross-culturally aware, reflexive, engaged with community in messy non-discipline-specific problems, able to critique and integrate information from many knowledge sources and work collaboratively – the competitive global education system increasingly marginalizes the cultural and structural contexts which foster such cultural competence. We provide two case studies in Indigenous Australia and the Pacific: both involve students and demonstrate the special quality and value of cultural competence and its connection with work across, and beyond, academic disciplines. We conclude that, while the political economy of the globalized education system is largely inimical to interdisciplinary work and the development of cultural competence, catalysing and supporting these processes is the responsibility of higher education institutions in a globalized world.