According to the new report, Extending the Campus - A Lesson in Successful Global Expansion for Higher Education Institutions, as demand for international education rises (growing at an average annual rate of 7.1 percent between 2000-2010), institutions are hoping to take advantage by broadening their footprints and brands in new geographies in both education and research.
The opportunities for higher education institutions to build revenues and reputations are ripe across the globe thanks to the growth of emerging markets and their respective burgeoning middle classes, as well the obvious impact that education has on spurring economic development and innovation.
An example of this is China which, according to research cited in the report, has invested US$20 billion in education since the 1990s and increased enrollment from five million post-secondary students in the mid-1990s to more than 34 million in 2010.
Yet, despite the best intentions of many institutions to expand beyond their national borders, many fail to develop the proper governance and operational frameworks in advance of, and following, implementation.
“A number of the assignments KPMG globally undertakes requires us to ‘unpick’ arrangements that became problems because the institution did not establish adequate oversight or governance frameworks up front to support the various transnational projects at their inception or when operational,” noted Mike Rowley, KPMG Global Head of Education and a partner for KPMG in the UK.
The report, which outlines key lessons learned in transnational expansion, features insights from KPMG’s Rowley and other KPMG partners in the educational sector, supported by four case studies from higher education institutions in Canada, India, the Netherlands and the UK.
Because institutions use a variety of operating models to engage in transnational expansion such as branch campuses, partnerships and online and distance education, there is no real common formula for guaranteed success, according to the report’s authors. This is why a phased approach is essential.
The report outlines a suggested six-step approach for higher education institutions to follow in order to minimize risk and maximize success in an increasingly complex, fast-moving and business-critical area.
Six Key Steps for Successful Transnational Expansion
- Outline the business case for expansion.
- Develop the full business plan.
- Conduct due diligence and negotiate the full agreement.
- Approve the agreement.
- Implement the business plan.
- Evaluate and review the project.
Mr. Rowley commented: “Developing a robust strategy for transnational expansion is not easy. It requires leadership teams to gain a strong appreciation for not only their institution’s internal capacity and risk appetite for expansion, but also the external factors and future trends that will influence the success of their strategy and the brand enhancement that will follow.”
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