Transnational higher education: “one of the great growth industries

of the future”?

3rd QS-MAPLE Annual Conference8 May 2013

Professor Nigel HealeyPro-Vice-Chancellor (International)

Nottingham Trent University

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Introduction

• “Demand for higher education is growing worldwide... Increasingly, emerging economies want to educate their students at home, and the UK - a global pioneer in developing educational facilities - is well placed to help… This is one of Britain’s great growth industries of the future” (UK Minister for Universities and Science , 2012)

• So:– What is transnational education?– How big is the global market?– Will it really be a “great growth industry”?

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What is transnational education?

• “Any teaching or learning activity in which the students are in a different country to that in which the institutional providing the education is based” (Global Alliance for Transnational Education, 1997)

• “All types of higher education study programmes, sets of study courses, or educational services (including those of distance education) in which the learners are located in a country different from the one where the awarding institution is based” (Council of Europe, 2002)

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General Agreement on Trade in Services (GATS) and transnational education

GATS terminology Transnational education variant

Mode 1 — Cross border supply

Programme mobility: distance or on-line education

Mode 2 — Consumption abroad

Student mobility: export education

Mode 3 — Commercial presence

Institutional mobility: franchise/validated partner and International Branch Campuses

Mode 4 — Presence of natural persons

Staff mobility: fly-in/fly-out programmes

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How big is the global market for transnational education?

• No clear data on scale of the global market

• Many countries do not record the overseas activities of their universities

• Some countries record enrolments of foreign franchisees and campuses…

• …but they cannot capture distance-learning

• The UK and Australia do require their universities to report overseas enrolments

• Use UK data to provide insight into the market

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Relative growth of export and transnational education in the UK

Source: HESA

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Surge in students studying for UK degrees abroadThe Guardian, 15 February 2013

•

“International offshoots of UK universities, partnerships with foreign institutions and online study mean there are now more students on UK university courses abroad than there are international and EU students coming to the UK to study”

“Look, there’s one of those old-fashioned international students getting on a plane!”

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What kinds of transnational education?

Source: HESA/SIEM

  2007/08 2008/09 2009/10 2010/11

Overseas campus 7,120 9,885 11,410 12,305

Distance, flexible and distributed learning 100,345 112,345 114,985 113,065

Other students registered at HEI 59,895 68,595 74,360 86,630

Overseas partner organisation 29,240 197,185 207,790 291,575

Other students studying overseas for HEI's award 70 35 50 125

Total 196,670 388,045 408,595 503,700

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But one kind is growing especially fast…

Source: HESA/SIEM

  2007/08 2008/09 2009/10 2010/11

Overseas campus 7,120 9,885 11,410 12,305

Distance, flexible and distributed learning 100,345 112,345 114,985 113,065

Other students registered at HEI 59,895 68,595 74,360 86,630

Overseas partner organisation 29,240 197,185 207,790 291,575

Other students studying overseas for HEI's award 70 35 50 125

Total 196,670 388,045 408,595 503,700

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Caveat 1: the “Oxford Brookes effect”

2007/08 2008/09* 2009/10 2010/11

Oxford Brookes University

870 163,295 162,045 239,945

Source: HESA

• Students enrolling part-time or online on ACCA level 3 courses are automatically enrolled as Oxford Brookes students for 10 years

• Once they have passed ACCA, they can write and submit a Research and Analysis Project

• If they pass, they are awarded BSc (Hons) in Applied Accounting

• 16,554 students have graduated since 2000

* Began reporting ACCA students as registered at Oxford Brookes

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Caveat 2: headcount not full-time equivalent

• Almost all (85%) of international students in the UK are full-time, paying fees of £10,000+

• Most (>70%) transnational education students are part-time, eg:– 48% are Oxford Brookes/ACCA– 22% are distance-learning

• Many course can be very part-time, allowing ‘study holidays’ and long completion times

• Tuition fees for transnational courses are much lower (that is the point!)

• Revenue from transnational education is much lower than from export education

Source: HESA

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“Enrolments x tuition fees = revenue”. Discuss.

• The 239,945 ACCA students pay Oxford Brookes £135 to submit their projects, about 1% of the annual tuition paid by international students on campus

• Oxford Brookes has 3,200 international students on campus

• The revenue is equivalent to 260,000 ACCA students submitting each year

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Outlook for transnational education

• S(domestic) =ƒ(domestic HE capacity)

• D(domestic): ƒ(population and GDP growth)

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All other things equal

• Demand for transnational education will increase:– If population (especially 18-22 years) grows– Per capita income grows

• Demand for transnational education will decrease:– If capacity/quality of domestic higher education increases

• In many developing countries, population and per capita income are growing…

• …but governments are investing in major expansion of domestic higher education

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The Higher Education Act, No. 101 of 1997

• Promoting quality and developing capacity

• Past and present projects: – Capacity Development and Training – Conversations on Quality and the Quality Assurance Fora – Good Practice Guides – Special Quality Promotion Projects – Student Participation in Quality Assurance (SPQA)

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Balance will change by country and over time

Population growth,

GDP growth

Domestic HE

capacity, regulatory

regimeHi

Lo

TN

E m

ark

et

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What about the supply-side?

Interviewees Institutional Affiliation

A Pro-Vice-Chancellor Russell Group university 1

B International Director Russell Group university 1

C Dean 94 Group university 1

D International Manager 94 Group university 2

E Pro-Vice-Chancellor University Alliance university 1

F International Director University Alliance university 2

G Associate Dean (Int.) University Alliance university 3

H Dean Million+ university

I Director British Council

J Senior Manager UK HE International Unit

K Senior Manager Northern Consortium UK

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Attitudes to expansion of transnational education: positive themes

1. Broaden the market for UK higher education– ‘never will be more than a tiny minority [of students] who can go

overseas… There is going to be an increasing need for TNE because of the growing numbers going into higher education’.

– ‘TNE is also becoming a core recruitment tool…some big universities have the majority of their international students coming from TNE programmes’

2. Build a global brand for UK universities– ‘any good research university needs to be globally connected… [TNE] hits

the soft power agenda’

3. UK government is driving TNE across all ministries– ‘[government] see TNE as a key part of export education, which doesn’t

need international students coming here’– ‘the British Council, the International Unit of UUK, UKTI, the new BIS unit,

Education UK, they are all trying to get us to do TNE’

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Attitudes to expansion of transnational education: negative themes

1. Risk aversion– ‘There have been lots of issues and there has been a reduction in these

projects [franchising and validation]. They are very one sided’– ‘too many failed IBCs, like UNSW Asia and George Mason University’

2. Some TNE activities are not scalable– ‘most [academics] do not understand or care…they want to concentrate on

their research’.– ‘people see [TNE] as a pain in the arse’– ‘the QAA is so overstretched, how can we ensure that quality is

maintained?’

3. Some forms of TNE are not sustainable– ‘[This] is not a sustainable model, you’re just plugging the gap until their

own sector fills it’

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Attitudes to expansion of transnational education: negative themes (cont’d)

4. No pot of gold– ‘if it’s about making money, there are more interesting

things to do — you’ll never make money in the medium term’

– ‘always a mismatch between promise and delivery… Projections in terms of numbers never materialise’

– ‘the costs of tutors, academic overheads, etc are not taken into account. If you included everything, you probably don't make money’

5. Internal resistance– ‘it is not our core business, we shouldn't be doing

something that takes up resources that could be used elsewhere’

Oxford undergraduates head for class

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Conclusions

• Transnational education wifely being seen as a growth industry

• Data on scale of global market is spotty

• UK data suggests that the market is large and growing, but data currently overstate the financial significance of the market

• Balance of population/GDP growth vs investment in domestic higher education will mean uneven and changing patterns of demand

• For universities in UK study, most are cautious about expansion of transnational education, with a number of inhibiting factors at work

• Final thought: beware disruptive technologies likes MOOCs (fad or game-changer?)