21st January 2014 Ken

UK international student restrictions behind universities’ international expansion, survey finds

In response to funding constraints, tighter student visa requirements and a rapidly globalising marketplace for higher education UK universities are increasingly looking overseas for expansion.

When the UK Border Agency last year tightened controls on international students coming into Britain it prompted an increase inthe number of UK institutions looking to establish overseas. The restriction on overseas students coming to the UK, particularly from India, has had a major impact on university revenues. In response universities are taking the approach that if the students cannot come tothem, they must go to the students.

In research carried out by Pinsent Masons, the law firm behind Out-Law.com, 67% of surveyed universities said that Government policy on immigration and fees made them more likely to establish an overseas presence.

The internationalisation of higher education is not, of course, a new phenomenon – 80% of universities surveyed already have an international presence – but the pace of internationalisation is accelerating, driven in most cases by the change in Government policy.

The most popular method of international collaboration is currently the use of joint or dual degrees, with 57% of those surveyed already providing these and 52% considering collaborating to reach overseas markets

But of growing popularity and importance is the use of joint ventures to operate overseas branches or campuses. Only 14% of universities surveyed currently are party to a joint venture but 48% areconsidering establishing one.

Joint ventures can offer a good balance for those seeking to take advantage of the opportunities international markets present. They avoid the major costs and regulatory burdens associated with a new, independently established campus whilst sending out a very clear signal that the university is serious about a particular market and its student population and offering those students access to a highly prized UK university experience.

UK immigration policies do not offer the only explanation for this growing trend. Another major reason why universities are investing so much time and energy in international expansion is because the market for higher education teaching and research is becoming increasingly international and increasingly competitive. If a university cannot offer the same geographical scale, scope and opportunity as leading UK and international rivals then it maynot attract and retain the best people and funding.

If done right, internationalisation can increase studentnumbers, improve the student experience and the quality of education, and can help organisations to expand their size and the range of learning opportunities they offer. But done badly, the same process can tarnish a university’s reputation both abroad and at home and can leave it with major problems and sizeable bills. Indeed, Pinsent Masons’ survey revealed that reputational damage is the risk that universities worry most about. The wrong tie-up can have terrible consequences for aninstitution’s name, something which is clearly disastrous in a sector where brand is so important.

Universities are as worried about quality assurance as they are about reputation, and of course the two are linked. However, only a quarter of universities are worried about risks to intellectual property although our experience is that universities should be alive tothe protections needed before making their information available in other jurisdictions.

When choosing where to expand to, the Pinsent Masons survey revealed that, unsurprisingly, universities are focussing on where the greatest demand is – namely countries with an expanding middleclass and a relative shortage of higher education places.

This is why universities are focusing on China, India, Malaysia, Singapore, Brazil and the Middle East. Of those surveyed, 80% of universities told us that they were targeting China.

More surprising is the presence of the USA, an already mature higher education market, on the priority lists of over half of universities.

While the most important factor in choosing a destination by far was expanding demand for higher education, the next biggest influencing factor was personal relationships. The importance ofthese traditional drivers for university action cannot be overestimatedand universities should work hard to encourage the development of theserelationships in growth markets.

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