Keeping UK HE attached to the world after Brexit

Among the challenges confronting British higher education in 2019 is how to maintain a strong global presence with the UK’s imminent departure from the European Union. Here are some thoughts

You might doubt it when hearing about universities running up alarming deficits after setting up international branch campuses, but higher education is one of the UK’s big exporting success stories.

Perhaps not so easy to believe with wall-to-wall Brexit doom warnings, including some being generated by British university chiefs themselves.

The New Year saw headlines screaming about ‘University debt: credit crunch looms as debt spirals’ in The Times, 3 January 2019 and ‘Brexit uncertainty means universities face a cash crisis as EU student numbers fall’ from i-news the next day.

And revelations that the University of Reading had made a £27 million loss at its Malaysia campus since opening in 2015, published in Times Higher Educationon 3 January 2019, won’t have helped, either!

Stronger presence abroad

But exporting UK higher education through what is known in the trade as transnational education, or TNE, can be good business and is helping to build a stronger presence for the UK abroad in these troubled times.

TNE covers much more than a vice-chancellor deciding he fancies having an outpost in some exotic place with the vague hope of also boosting income for the university coffers.

It also covers a multitude of methods of providing higher education to students abroad, from franchising and validating courses taught locally at universities around the world, to partnerships and joint ventures that can range from using a couple of classrooms in a domestic university to a fully-fledged campus.

Latest figures for 2016-17 show it has been extremely successful for UK universities overall, with 707,000 students studying for UK qualifications abroad under all manner of TNE arrangements, including online and distance learning.

That compares with 442,000 international students coming to courses taught in the UK, a figure that has remained relatively flat for some years due to a combination of factors, including uncertainty about how welcoming Britain is to foreigners after the Brexit vote, a less attractive post-study work environment than competitors like Canada and very high tuition fees compared to other countries offering university courses taught wholly in English.

The figures show the number of students on UK TNE programmes at 1.6 times the number of international students coming to UK to study, according to a new report from Universities UK International on the scale of UK higher education transnational education 2016-17.

Only 8% of TNE via branch campuses

Perhaps the important fact to highlight is that less than 8% of TNE students taking UK university qualifications abroad were taught at international branch campus outposts.

The biggest number of UK TNE students (44.7%) study through collaborative provision, which is where the future seems to lie along with growing distance and online learning, which currently accounts for nearly 20% of TNE activity.

So, while it is natural that many working in British universities and the media view with alarm revelations of large losses for some university outposts abroad, international branch campuses are just a small, albeit high-profile, part of the UK’s transnational education effort.

Derrick Betts, a TNE adviser with EY Parthenon, says: “Contrary to popular opinion, most universities are not just setting up branch campuses for financial reasons. They are going overseas to extend their reach and how they recruit students, improve how their brand is perceived overseas and to support research activities.”

So what of Reading’s Malaysian venture?

The Times Higher Ed said the losses at the University of Reading’s Malaysian branch campus should provide a ‘salutary lesson’ on the challenges associated with international ventures.

And Vincenzo Raimo, Reading’s pro-vice-chancellor (global engagement), doesn’t dispute the figures, but tells me: “The £27m is not the annual cost, but the investment to date” and that while the financial situation is “being actively monitored, high upfront costs were always expected in the start-up phase.”

But the Reading experience shows the pitfalls that can confront a university from the western world trying to set up a successful business in an emerging market.

Finding the right locally based partner seems crucial, as does the location. Reading, along with several other foreign universities, seems to have been attracted to site its campus in Iskandar Education City in the southern tip of Malaysia though initial subsidies.

Research by EY Parthenon, which I saw for a report on international branch campuses for EducationInvestor Global last year, said: “Most campuses in Iskandar are struggling due to poor location.”

The EY Parthenon study added: “Long-term sustainability relies upon evaluating local market conditions for a planned and measured expansion.”

Raimo, or Enzo as he is better known in TNE circles, was Director of the International Office at the University of Nottingham for 16 years before moving to Reading in 2014, and says: “Unlike Nottingham in Malaysia or Liverpool in China, Reading’s campus in Malaysia is a fully owned subsidiary. This has many advantages in terms of control and decision-making. But a fully owned subsidiary means that there’s no risk sharing.”

As for the choice of location, Raimo says: “We’re all probably finding it more difficult than we originally anticipated, but that’s different to struggling.”

More difficult than anticipated

He suggests the situation is very similar to Nottingham’s early growth in Malaysia 15 years ago, which effectively started its branch campus in the middle of a palm oil plantation in the middle of nowhere. “Now it’s a thriving area, with good communication links to Kuala Lumpur, lots of housing and other activities feeding the university.

“Iskandar is the same now, but what will it be like in 15 years’ time? A thriving area meeting Singapore’s expansion needs? Our new plan is, I think, much more realistic and measured and has to be seen in the context of the longer term.”

The Times Higher on 3 January also mentioned that UCL had announced the closure of its international branch campus in Qatar in October 2020 and reported that other UK universities had made a loss on their branch campuses, including Xi’an Jiaotong-Liverpool University, or XJTLU, in China.

The report quoted a spokeswoman saying while it had made cumulative losses of £13.4m in its early years it was now making surpluses, £1m in 2016-17 and £1.4m in 2017-18.

XJTLU success story

I was surprised to see XJTLU lumped in with a story about branch campuses in distress, and so was TNE consultant Janet Ilieva, who among many things advises the Philippine-UK Transnational Education programme, run by the British Council and the Commission of Higher Education in the Philippines.

She told me: “I can’t think of a better example of a successful and financially viable international branch campus operation. It attracts top achieving students from the Chinese Gaokao exam takers and many of the best then progress to Liverpool as part of their 2 + 2 years degree.

“This probably generates a significant income and saves on agents’ fees and other forms of commissions associated with international student recruitment to the UK. The students are highly successful in their UK studies too and the majority of them continue into postgraduate studies.”

I certainly got the same impression when doing my feature on international branch campuses in emerging markets for EducationInvestor Global and used XJTLU as my case study.

In that, I said Liverpool had gone “far beyond traditional approaches to transnational education by establishing an independent Sino-foreign university in partnership with Xi’an Jiaotong University, a leading research university in China.”

Launched in 2006, XJTLU was the first of its kind to be approved by the Chinese Ministry of Education and is far more than a branch campus of either university.

Christine Bateman, Head of International Development at the University of Liverpool, told me: “We’ve created a really innovative new institution which blends the best of approaches in the UK and China. The initial intake of students at XJTLU was just 164, but this has grown to 13,000 students, making it the largest Sino-foreign university in China.”

It offers students dual degrees and students can transfer to Liverpool University in the UK for the final 2 years, as 1,900 did this year, said Bateman.

Plans for a new campus developed by XJTLU in partnership with Liverpool and Xi’an Jiaotong universities have been announced, with support from Taicang city government, to provide highly skilled, international graduates and expertise in areas such as artificial intelligence and robotics. It plans to open in 2020 with the target of 6,000 students by 2025.

So, at a time of so much uncertainty about Britain’s place in the world, exporting UK university teaching – despite the high-profile mishaps – looks set to play an even bigger role in convincing the international community that while we may be leaving the EU, we are certainly not leaving the world!

Keeping UK HE attached to the world after Brexit