The long-awaited new UK international education strategy looks and feels very different from the last one.
Gone is the target for international recruitment from the previous strategy, which had, in any case, been exceeded substantially. It has been replaced by a “bold ambition” to grow overall education exports to £40bn per year by 2030 (the figure for 2022 was calculated at £32.3bn).
The emphasis is on growing transnational education (TNE) and partnerships in education and research, as well as outward student mobility, and the UK’s global reputation in education. There is much to welcome in this strategy. Not least the cross-government (FCDO, DfE and DBT) ownership of the agenda, and the recognition that the rapidly changing geopolitical landscape requires support from the UK government and its institutions to support the sector.
But let’s turn to what isn’t in the strategy. Great strategies are adaptable to a changing landscape, and the external environment in international education is shifting very rapidly.
Times change
Two major issues are worth highlighting. First, there is no such thing as a single TNE model, and the financial margins differ markedly depending on the host country and the teaching model. The margins depend on the nature of the regulatory regime and the nature of the host country partnership(s). International campuses which involve an element of research activity are also more expensive to run.
It’s fair to say that many UK universities operating overseas have tended to engage in TNE not solely because of financial margin, but often to raise their international profile in order to attract more direct recruitment to their UK campuses. Others make a larger margin by adopting a very streamlined and low-cost teaching model.
Second, the financial sustainability of UK universities has been greatly impaired by the instability of direct international recruitment. The international education strategy uses the cautious language of “sustainably recruiting high-quality students” to the UK, not least because of the difficult immigration debates student flows have caused.
Canada, Australia and the USA – the other three of the “Big Four” international student destinations – have had similar debates on student visas. But the shift from the Big Four dominating international direct recruitment to a situation where a “Big Fourteen” have come to compete more aggressively for this market has been very sudden, and has left the UK and other anglophone countries having to compete much more aggressively.
The countries experiencing growth range from Europe (for example France, Germany and the Netherlands) to Asian destinations (such as China, Korea and Malaysia). There are many reasons why these new destinations have become more competitive beyond the student visa regime: student safety, work experience opportunities, pricing/affordability, cultural and language factors, and the geopolitical environment have all played a part.
Universities in the Big Four are responding by competing on some of these fronts. Many of the new countries and jurisdictions in the Big Fourteen have explicit targets to grow international numbers, unlike the new UK strategy (e.g. Japan, South Korea, Hong Kong, and France). Many non-Anglophone countries have embraced English language teaching, especially at master’s level.
We need new models
But is this a definitive trend we are observing away from the Big Four – or is the market just becoming more contestable and the landscape will evolve even further?
I would argue the latter: I believe that the international recruitment market could continue to evolve rapidly. Under the circumstances, universities in the more established markets will want to forecast the potential short-term trends and cycles in student demand, but more importantly the underlying factors: to what extent are some factors like studying closer to home important for students in large sender markets like China and India? To what extent are there trade-offs between different factors such as the cultural affinity of the host nation and affordability/pricing? Economic theory, and indeed the instability of flows since the pandemic, suggests that these factors do interact and there are trade-offs.
University leaders will want to gain a much more sophisticated market understanding in the next five years than relying on the simple linear market trends which we adopted in our recruitment forecasts 10-15 years ago. That will require much more refined economic analysis of what students (and their families) think about international study.
Similarly, UK and other universities jumping on the accelerating TNE bandwagon will want to understand how this interfaces with direct recruitment in the Big Fourteen. We know that an in-country TNE presence in a large sender market can have an impact on direct recruitment.
Watch this landscape carefully over the next five years – it will rapidly evolve.