As the pace of globalisation continues unabated, higher education institutions around the world are increasingly finding opportunities to broaden their scope, footprint and brand into new geographies.
For some institutions, the opportunity lies in the need to grow their revenues and enhance their reputations. For others, the demand by students for a more global educational experience is creating new approaches to education that transcend borders. No matter the reason, a growing number of higher education institutions are taking advantage of these global trends to drive the growth of transnational education and research.
The world is indeed getting smaller: businesses are becoming increasingly global; populations increasingly mobile; and ideas increasingly transportable. At the same time, the market for higher education has also become more global.
- Global rankings: Many of the leading university rankings now include comparisons of global higher education institutions, making the market more global and more competitive.
- Business demands: Globalised businesses are seeking employees with global skills and experiences, thus fuelling demand for transnational educational opportunities.
- Enhanced brand: Transnational universities are experiencing reputational benefits and increased potential for revenue growth as a result of the growing premium placed on international institutions.
- Transnational research: As higher education research becomes increasingly global in nature, institutions are benefiting from the ability to draw funding and research capabilities from around the world.
National governments in developed and developing economies are also recognising the benefits of hosting transnational educational institutions. Indeed, many jurisdictions are now exploring the ways in which they can use tax benefits, educational grants and land concessions to attract foreign institutions to their countries.
- Economic development: Global education and academic capability lead to enhanced levels of human capital, which can often result in greater development opportunities for host countries.
- Innovation: As evidenced by the success of business clusters such as Silicon Valley in the US, many countries are seeking to capitalise on niche growth markets to drive innovation and commercialisation.
- Emerging markets: The benefit of hosting transnational educational institutions has not been lost on the emerging markets, which are rapidly expanding their education sector both at home and overseas.
- Growing middle class: A growing middle class and the industrialisation of emerging economies are increasing global demand for high quality education in Asia and the Middle East.
The need to expand into new geographies is even clearer for the institutions themselves. In the developed world, limited potential for organic growth has forced many institutions to look overseas, where increasingly affluent populations combine with growing youth segments to create valuable new markets.
- Increased financial pressures: As governments continue to focus on austerity, many institutions are experiencing reduced levels of funding, forcing them to supplement their revenues and augment their enrolment by looking outside their home country to attract students.
- Added value: Global reputations also draw a higher calibre of academics and researchers who bring new ideas (and often, lucrative research grants) that increase the value of the institution overall.
- Foreign capital: Particularly for institutions in markets where fees (and therefore revenues) are essentially capped by local regulation, expansion into foreign markets can offer a significant opportunity to secure much-needed foreign exchange.
- Non-traditional delivery: Budget cuts and the global financial crisis have forced institutions to seek alternatives to the traditional face-to-face model of education. Coupled with increased demand and expectation from students to use technology in education, the availability of online education has increased dramatically, either as a stand-alone offering or as part of a blended approach. This has increased the diversity of higher education providers with expansion by the private sector in certain jurisdictions.