Transnational education delivery in a changing global

landscape

Scott Crighton26 July 2012

Outline

1. Key factors influencing TNE Regulatory environment Competitive environment Risks and reputation

2. What has the impact been on TNE provision?

Growth or consolidation? Managing responsibilities Business case development

3. Next steps what should providers do?

Transnational Educaiton (TNE) models

For the purposes of this discussion, two types of activities will be considered as TNE Offshore partnership programs International branch campus activities

Definitions

Partnership programs: Home institution accredited award

programs offered through a ‘local’ partner institution. No “bricks and mortar”

International branch campus: Home institution accredited award or

awards offered in another country, with the home institution having established a physical presence in the offshore location. (“bricks and mortar”)

Factors impacting on Australian transnational education

A range of factors are impacting on TNE. A few examples to be considered here are:Growth of regulatory agencies and changing Government policiesIncreasing levels of competition in traditional TNE marketsGrowing awareness of risk factors

Regulatory environment

Growth of regulatory agencies and frameworks in Australia (e.g. AUQA/TEQSA, ASQA,

AQF) in TNE markets (CPE; HKCAAVQ; MQA,

etc)

An increasingly competitive environment for TNE

Government initiatives in key markets Policy shifts in UK Higher Education –

leading to outward push Competition from cheaper models that are

difficult or impossible for Australian institutions (e.g. validation model)

The offshore campus phenomenon The persistently high Australian dollar

TNE Risk factors

There are many risks with running TNE activities, including: Financial

poor financial viability payment defaults Changes to market demand and consequent loss of

income collapse of programs/partnerships and meeting

teach-out requirements.

Legal contract non-compliance in-country regulatory requirements.

Risks

Quality Ensuring that what is delivered offshore meets the

same quality standards as what is delivered onshore

Balancing academic and financial considerations “Replicating” the student experience Language Meeting student support services offshore

These are particular challenges in partnership relationships where another institution has key academic and administrative responsibilities.

Risks

Reputation

Any offshore TNE provision represents an extension of the home campus. Any reputational damage offshore will therefore have reputational impacts on the whole institution and the sector.

Reputational impact can be significant if partnerships or campus locations collapse obligations to students are not met Program quality requirements are not met institution is misrepresented Partner is brought into disrepute Other in-country associations brought into disrepute.

Risks

There are recent examples of Higher Education institutions having their reputations severely damaged due to their offshore activities: University of Wales London School of Economics

Changes in TNE?

Have changes in the external environment, as well as growing institutional awareness of risks, led to changes in Australian TNE?

Changes in TNE?

A general trend is apparent among Australian TNE providers toward consolidation of partnerships and programs, but with student numbers nevertheless either growing or levelling out .

Singapore & Malaysia examples: declines in the number of Australian institutions

providing HE TNE over past decade numbers of enrolled students in Singapore increased

by 57.7% from 2002 to 2008 Numbers of students have increased 7.5% p.a. in

Malaysia since 2004/5 (See Banks, et al., June 2010; 54)

Changes in TNE? (International Branch campuses)

The trend among Australian providers toward fewer but larger TNE activities is also marked in international branch campus (IBC) activity.

Number of Australian IBCs has declined from 14 to 12 from 2009 to 2011

Australian IBCs account for only 6% of world total, but 52% of IBC enrolment numbers for the top 15 IBCs (25,600 of 49,180), or 21% of the estimated world total (25,600 of 120,000)

Source: OBHE IBC Report 2012

Australia vs the rest of the world:are the trends the same?

For other TNE provider countries there appears to be differing trends to Australia

For example, the number of IBC’s are showing significant growth internationally, e.g. number of UK IBC’s has nearly doubled from 2009 to 2011 (from 13 to 25)

A large number of IBC’s have very small student numbers: median student numbers in 2011 was 235 per campus

There are 78 US branch campuses, but understood to have relatively small numbers of students in most cases.

Source: OBHE IBC Report 2012

Trends related to consolidation of Australian TNE activities

Consolidation trends have led to the development of more complex institutional relationships

TNE activities span a greater number of academic and functional areas within both home and partner institutions.

Within this context, coordination and careful management of TNE activity has become far more critical.

TNE management and QA centralisation?

Survey of Australian institutions undertaking TNE have shown trends to management centralisation in:• New business development• Contract management and monitoring renewals

and exits• Enrolments and graduations• Financial tracking• Quality assurance and audits• High level communications • Marketing approvalsSource: Crighton and Nery 2010

Stakeholder management

Understanding needs and requirements Clearly defining internal roles and responsibilities –

helps ensure a more coordinated approach with partners

Coordinating communication Clearly defining, reviewing and monitoring

responsibilities of each party • Clear detailed legal agreements• Guides and manuals• Regular formal and informal communication • Monitoring tools and databases• single activity calendar, etc.

Business Case Development

Increasing understanding of importance of high levels of rigour in the assessment of new TNE opportunities:Strategic assessmentDetailed market analysis and assessment – inc. competitor analysis, demand assessment, impact of government policies, etc.Business model & associated roles and responsibilitiesPartner due diligence (legal, financial, facilities assessment, capacity assessment, ranking, relevant experience, etc.)Financial analysis – detailed costingRisk assessmentManagement structure

Management structures

TNE management – ensuring success

Important that central support areas are developed with • contracting experience• financial management and refined costing

frameworks• monitoring frameworks• refined partner management models• quality assurance expertise

Roles and responsibilities – properly defined and managed

Ongoing challenges

Meeting competitive challenges while maintaining quality and keeping risks under control

Finding & adopting innovative models Ensuring rigorous systems for assessment

and approval of business opportunities, balanced against importance of being nimble

Finding a good balance between centralised and decentralised management & obtaining stakeholder buy-in.

Preparing for the future: what should providers do?

Prepare for changes in existing markets - explore new markets & delivery models

Take all possible measures to ensure reputation is not damaged

Continue to strengthen business planning, management, monitoring and quality systems, and ensure appropriate levels of central coordination of these activities

Ensure clear exit and transition plans

Questions?