September 2007    Volume 20, Issue 9
  International Education Intelligence   
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Institutions, Not Students, Get the Travel Bug

by Grant McBurnie and Christopher Ziguras

Everybody knows that the number of tertiary students traveling abroad to study continues to grow. The OECD reports that in 2003 there were 2.12 million tertiary students studying outside their country of origin, a rise of nearly 50% since 1998. But when it comes to moving education across borders rather than learners, we are in the dark. Governments collect very little official data on internationally mobile programs and institutions, commonly referred to as transnational education.

Globally, hundreds of thousands of students are enrolled in foreign programs in their home country, and the largest numbers are in Asia. After 20 years of continued growth, now fully one-third of Singapore’s tertiary students and onequarter of Hong Kong’s are enrolled in transnational education programs. British universities, led by the University of London and the United Kingdom’s Open University, enroll the largest number of offshore students, followed by Australia and the United States. Over the past decade, offshore enrollments in Australian universities have grown four-fold to around 64,000, representing over a quarter of the total 240,000 international students in Australian programs. Industry body IDP Education Australia predicts the number will continue to rise to more than 430,000 by the year 2025, fuelled largely by growth in Asian markets.

Transnational education offers students the opportunity to gain a foreign degree in their home country, without the expense and disruption of living abroad, and often with fees lower than those charged at the parent institution. It also poses particular challenges for quality assurance and regulation: The potential for “cowboy” operators is huge and students may potentially end up in a program that is poorly staffed, in substandard premises and with little connection to the awarding institution.

The bulk of students who consider studying in transnational education programs live in cities experiencing rapid economic growth, most notably Singapore, Hong Kong, Kuala Lumpur and Shanghai. These cities’ internationalized economies pay a premium for Western business skills and English-language proficiency, and local institutions are often unable to develop new programs to respond to labor-market demand as quickly as foreign universities with established programs. Students in these emerging global cities are able to choose from a wide range of foreign programs with varying levels of local facilities, face-to-face teaching and support services.

Growth Spurts

The trajectory of transnational education is best viewed within four broad phases of higher education development that can be discerned in many countries in the region since the 1980s. With rapid economic development, demand for higher education quickly outpaced the capacity of local public universities to respond, particularly in those fields in demand in increasingly globalized economies. In this first phase, the number of students traveling abroad to study grows dramatically. Taiwan, Singapore, Malaysia and Hong Kong experienced this growth of outward mobility in the 1980s and ’90s, and currently numbers are growing from those countries whose economic growth has come later, such as China, India and Vietnam.

Over time, the capacity of the local system to meet the education demands of its citizens is built up, leading to a second phase in which growth of outward student mobility slows. In some countries, such as China, the growth of local institutions is funded primarily by governments through public universities; while in others, such as South Korea, the growth has been largely in the non-government sector. At this stage foreign universities play important capacity building and demand absorption roles, chiefly in partnership with local private providers and public institutions.

A third phase is reached when domestic providers are able to respond to student demand and the number of students seeking degrees abroad flattens out. The most economically developed countries in Asia have now reached this phase. As local institutions become more competitive and governments become concerned with quality over quantity, lower-status transnational programs get squeezed out. In Singapore and Malaysia, many longstanding transnational programs are being challenged by local private institutions, which are now being accredited to award their own degrees after years of partnering with foreign universities.

A fourth phase involves a country shifting from being a net importer to a net exporter of education services. When domestic capacity and quality is sufficiently established, governments are able to encourage the export of education, primarily by attracting foreign students. In recent years Singapore, Malaysia, the United Arab Emirates and Qatar have all sought to establish themselves as education hubs, drawing students from the region and beyond. In this phase, governments work to attract branch campuses of highly prestigious foreign universities to be a major draw card. Singapore, for example, now boasts campuses of Australia’s University of New South Wales, France’s INSEAD business school, the University of Chicago Graduate School of Business, Mumbai-based S. P. Jain Institute of Management and Research, and a long list of prestigious teaching and research partnerships with leading international universities. For the host country, the anticipated benefits are financial and reputational, as well as academic.

No Teacher’s Pets

Ironically perhaps, transnational providers are in some ways less constrained by government regulation than local providers. Transnational programs take three major forms: distance education with little or no local support, local partner-supported delivery, and the standalone international branch campus. Their cross-border character has allowed them to avoid some of the most restrictive aspects of national regulatory frameworks. Domestic universities across most of the region are subject to detailed bureaucratic direction, and their growth has been limited by other demands on the public purse. In many countries, domestic private institutions have been restricted to providing diploma-level programs. The early twinning programs in Southeast Asia were structured so as to work around these regulations, by combining the resources of a foreign university not subject to the meddling of the Ministry of Education, with a local private college that could not offer its own degrees but was not prevented from offering someone else’s.

Some Asian countries are yet to develop any regulations governing cross-border providers, including Laos and Sri Lanka. Similarly, Vietnam’s regulations only cover the establishment of foreign-owned institutions, leaving foreign programs delivered through local partners or by distance education unregulated. The majority of countries in the Asian region have relatively liberal conditions, usually requiring initial approval and ongoing quality assurance checks similar to those applying to local institutions. This is the case in Bangladesh, China, Hong Kong, India, Japan, Malaysia, Singapore, South Korea and most other countries in the region.

Drawing on the four-phase model set out above, we suggest that the degree and type of regulation employed depend on whether a government is concerned primarily with quantity or quality of higher education. Typically, countries experiencing growth in demand for higher education that cannot be met by local providers establish relatively “light touch” regulatory frameworks, aiming to expand the volume of transnational provision and increase the capacity of the system. On the other hand, countries with stable demand and adequate supply of higher education establish more stringent regulatory frameworks. These aim to promote forms of transnational provision that enrich the national system, complementing local providers in ways that create greater diversity and enhanced student choice.

Overall, we can observe that market access restrictions are becoming much less common, and that quality assurance systems are becoming more widespread. There is a general regional trend for governments to move away from protectionist barriers to market entry of foreign providers and discriminatory policies that favor domestic institutions. Liberalization of regulatory frameworks has been widespread both in order to increase the presence of foreign providers where there is a shortage of supply locally, as argued above, and also to be seen to be treating foreign and local private institutions in a nondiscriminatory manner as is required by various free trade agreements.

Despite widespread trade liberalization, quality assurance requirements are becoming more stringent as capacity is built up, allowing governments to manage markets in order to avoid oversupply, and reduce the proportion of students enrolled in foreign education by gradually raising the bar and eliminating the bottom end of the market. Further, despite the minutiae of national differences, we suggest that shared interests will drive an increasing regional and global trend towards convergence of the criteria and mechanisms for assuring quality. Simultaneously, the best local institutions are offered the opportunity to award their own higher level qualification, the best foreign programs are invited to establish branch campuses, and the others find the market conditions more and more competitive without either their own local accreditation or a fully fledged campus.

Mapping the Future

Historically, the chief movement of transnational education institutions has been from Western Anglophone countries (especially Britain, Australia and the U.S.) to countries in Asia (particularly Malaysia, Singapore and Hong Kong). However there is reason to believe that this pattern of export from developed to developing countries will increasingly be supplemented by trade between developed countries and between emerging economies. In particular, there are signs of a growing intraregional trade in education as Asian institutions begin to expand abroad. We note, for example, the establishment of Indian and Pakistani campuses in the U.A.E. (e.g. Mahatma Gandhi University, Birla Institute of Technology and Science, Manipal Academy of Higher Education); Malaysian colleges expanding into Sri Lanka and India; and Singapore-based institutions moving into China.

Australia, well-established as an education exporter, expects to increasingly become an importer of transnational education. Consistent with its commitments within the WTO and various bilateral FTAS, Australia recently liberalized and made more transparent the requirements for foreign education providers. It is expected that there will be at least six such providers in place during 2007, variously from the U.S., the U.K. and China. This follows U.S., the U.K. and China. This follows the 2006 opening of the U.S.-based Carnegie Mellon University’s campus, which enjoys an A$20 million ($15.6 million) grant from the South Australian government. This phenomenon seems likely to grow, as providers see the opportunity to service Australian students and to use Australia as a geographically congenial base to attract students from the Asia-Pacific region and elsewhere.

As governments raise the quality bar, students in the region will have more choice of high quality transnational education. At the same time, where governments are slow to ensure the quality of foreign programs, consumers will need to be more discerning and well-informed in their selection. Of the regulatory systems operating across the region, the Hong Kong Non-local Higher and Professional Education (Regulation) Ordinance, operating since 1997, is a model for transparency and consumer information. Providers are required to furnish the government with a range of data on course content, delivery methods, student requirements, staff qualifications, facilities provided, and quality assurance methods. Reports are updated annually and the public can inspect all documentation and consult a Web listing of approved providers, who must list their registration number in all advertisements and correspondence.

An important effect of transnational education is to up the ante on quality expectations for the local system. Governments are under pressure to strengthen national provision, pushing many public universities to modernize, to become more autonomous and client-focused. International programs —unfettered by the red tape and inherited bureaucratic burdens of state systems—have been relatively nimble in responding to the changing needs of learners. The challenge for governments will be to appropriately balance nation-building priorities with demand-driven education.


Mr. McBurnie is research associate in the faculty of education at Monash University and Mr. Ziguras is associate professor of international studies at Royal Melbourne Institute of Technology.

Reprinted with permission from the Far Eastern Economic Review © 2007 Review Publishing Company Limited. All rights reserved.

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