Guiding Principles Shared for Global Expansion in Higher Education 

• Governance and operational frameworks must be prioritised up front

Higher education institutions around the world are responding to the increasingly compelling drivers for the continued globalisation of their market, but, when planning transnational expansion, institutions do not always take the critical steps necessary to either maximize the opportunities or to manage the associated risks, according to ‘Extending the Campus,’ a new report from KPMG International.

The professional services firm asserts that transnational growth is driven by a host of factors:

• Emerging markets with a growing middle-class aiming to enhance their economic development by attracting foreign institutions as well as investing in their own local education capabilities.

• Institutions in mature markets, especially those impacted by austerity measures, responding to pressure on domestic enrolment and revenues by pursuing growth outside their immediate geographies.

• A drive for global brand enhancement (and protection) to attract the highest calibre academics and researchers.

• Increased demand by employers and students for global skills and experience. OECD data shows that growth in the number of students opting for an international higher education was at an annual rate of seven percent between 2000 and 2010.

• Increasing global collaboration on research activities.

Mike Rowley, KPMG’s UK based global head of education, said: “The opportunities for higher education institutions to realise brand and/or revenue enhancement are numerous across the globe and it’s entirely right that many are taking advantage by broadening their footprints and brands in new geographies in both education and research.”

The scale of growth in the education market is highlighted in the report by the example of China which has invested US$20 billion in education since the 1990s and increased enrolment from five million post-secondary students in the mid-1990s to more than 34 million in 2010.

The report cautions though, that in expanding beyond their national borders, institutions do not always develop the right governance and operational frameworks in advance of, and following, implementation. This risks both unexpected complications down the road and failure to deliver maximum value.

In fact, noted Rowley: “A number of the assignments we undertake across the globe require 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.”

Because institutions use a variety of operating models for transnational expansion such as branch campuses, partnerships and online and distance education, there is no one formula for guaranteed success. But the report outlines a set of ‘guiding principles’ for higher education institutions to follow in order to minimise risk and maximise achievement in an increasingly complex, business-critical area:

• Develop a framework for expansion - deploy overarching governance structures and processes to guide all overseas activity over their life cycles.

• Focus on communication - keep academic staff, administrators and researchers aware of established processes and updated on emerging risks in relevant markets

• Align clearly to academic and research strategies – secure early academic engagement and ensure any overseas venture supports the overall business strategy.

• Take an iterative approach – expansion initiatives often take longer than anticipated to realise so regularly review progress and make adjustments as necessary to timelines and budgets.

• Undertake due diligence - as a project develops to help identify emerging issues to adjust course to avoid ‘unpicking’ arrangements after the event.

• Build transparent partnerships - engender open lines of communication and focus on mutual benefits and transparency.

• Plan appropriate exit strategies - consider upfront as exiting a partnership can be even more complex than initiating one.

Rowley concluded: “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.”

The report, which outlines key lessons learned in transnational expansion, set out an approach to deliver expansion initiatives and features four case studies from higher education institutions in Canada, India, the Netherlands and the UK in addition to further insights from KPMG member firms globally.

ENDS

For further media information, contact:

Alison Anderson, PR manager, KPMG

T: 0113 254 2980 E: alison.anderson@kpmg.co.uk

About KPMG

KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 152 countries and have 145,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.