10 questions to answer before launching a transnational HE venture

Higher education is one of the world’s great growth industries, and more and more universities are looking to ride the wave. In the next decade, we expect the number of established universities launching transnational higher education ventures to double, both in emerging economies and in more mature educational environments.

Multiple campuses globally are operated successfully by a diverse group of universities, including the University of Nottingham, Monash University, New York University, Insead business school in France and the Rochester Institute of Technology in New York. More are taking a cautious first step, in partnership with a foreign entity, seeking to get paid for the use of their brand and intellectual property while maintaining control of each. Many will try to enter the newly emerging higher education markets of Asia and Africa.

Of these ventures, some will flourish, but many will fail. To succeed, institutions need to look beyond the short-term headlines and build their future on a long-term strategy. Our consultancy work with many different universities across the world convinces us that the institutions that succeed will be those that best answer the following 10 questions:

What is my organisation’s game plan?

Answers to this question often vary widely, even within an institution’s own leadership team. Clarity and agreement about why your institution has decided to engage in a transnational venture are essential, right from the start. Are you aiming to increase revenue? Enhance your ranking? Recruit and retain high-quality faculty and students? Grow international student numbers? Develop new programmes and improve learning outcomes? Or simply keep up with the competition?

Time spent discussing and agreeing your objectives is never wasted. It maximises the likelihood of unanimity in your leadership team and buy-in from faculty and staff. It allows investments to be compared with alternative uses of capital, and outcomes to be measured against agreed objectives. As with any business decision, risks can be calculated and managed. Fortunately, there is now a considerable body of experience available to draw on.

Is a virtual presence sufficient?

Many institutions that offer programmes fully online operate successfully across borders. Yet employers and parents or guardians in emerging economies are often sceptical about the value of online-only study. And as it is generally parents or guardians who pay the tuition fees, they tend to have the final say on where a student goes to college.

So while there are many ways for online teaching and learning to enrich a curriculum, you will frequently need a physical presence in a transnational education venture both for academic success and to capture sustained market share.

Which model is right for our organisation?

It is worth considering the full range of options. One is study- and teach-abroad partnerships, in which an international institution hosts students and/or faculty for a semester or a year. Programmes are taught either by your partner alone or with your faculty in residence. There may also be exchanges involving international students and/or faculty.

Another option is to deliver programmes internationally by hybrid teaching, delivered either digitally or through a “flying faculty” model (where staff from your home institution visit for short periods). Your partner institution will usually provide support services for students. Such programmes often entail joint or dual/double degrees, or are on a franchise or validation basis.

A third option is a multi-campus programme, in which students divide their time between more than one country, earning awards and alumni privileges from your own institution and one or more others. This model is increasingly popular for executive MBA programmes, such as the top-ranked Tsinghua-Insead (TIEMBA) programme, but is also growing for undergraduate programmes in response to student demand.

Meanwhile, pathway partnerships allow your institution to accept transfer students from an international partner after one or two years. This model ensures that such students are prepared in the required language of instruction and culture of higher education, reducing the need for a transitional year or preparatory programmes on your home campus.

Last, of course, are full-service branch campuses, where you award your own degrees and offer the possibility of transfers to your home campus. But while the institutions listed above have made a success of this approach, others, such as Virginia’s George Mason University in the United Arab Emirates and the University of New South Wales in Singapore, have been unable to make it work financially.

Whatever your preferred mode, we advise you to minimise risk by starting small and specialised – although we recognise that there are cases where funding priorities and institutional strategies may sometimes lead to immediate development of full-blown campuses abroad.

Is there a realistic and viable market for us?

Before initiating a transnational venture, your institution must fully understand the intended market. How selective will you be? Will you adhere strictly to your traditional admissions standards? Will you admit only students already proficient in the principal language of instruction or offer intensive language classes for a year or more? Are you aiming to meet local employment needs or to prepare students for global careers? Do you intend to target only local students or to recruit regionally or globally? Is there a robust and sustainable pipeline of students for your programmes?

In much of Africa and Asia, most students will be the first in their families to go to university. Often, relatives will be making great sacrifices to support them, in the expectation of a significant and relatively rapid return on their investment. How should your institution price its programmes? What scholarships or financial aid should you offer? What segments of society should you seek to serve – the affluent few or a broader demographic?

In our experience, failure to understand the market and position the institution accordingly is the most common cause of failure in transnational higher education.

What is our competitive position?

In most countries, there is already a mix of public and private universities, probably across a wide spectrum of quality.

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In much of Africa and Asia, the expectation of undergraduate programmes may be for a British-style three-year specialised model, leading to the kind of degree that would be earned at graduate school in the American system. Undergraduate programmes with a strong liberal arts and general education component are harder (although not impossible) to sell in such markets. Detailed understanding of the local and regional higher education landscape is therefore crucial. Most mature institutions will seek to position themselves at the higher end of the quality spectrum. But an international-sounding name is not sufficient on its own to command a premium; some relatively low-ranked for-profit operations claim US or UK connections. A new offering should be clearly differentiated, and its value proposition communicated effectively to an increasingly sophisticated target market.

Do we fully understand the local regulatory structure?

Every country – and, in some cases, every state or local jurisdiction – has its own licensing and accreditation rules. Such accreditation is usually an essential element of a marketing strategy where employment in the professions or government sector of the host country requires a locally recognised qualification.

Most accreditation bodies in developing economies value international qualifications but generally will not simply rubber-stamp them. Expect to undergo the full and often lengthy process required by each jurisdiction before receiving local accreditation.

The universal quality needed when dealing with regulators is transparency. Most regulators are honest, helpful and supportive if new entrants are seen to be bringing something of value to their jurisdiction. Where regulators do not entirely fit this pattern, you may need an influential local partner – or avoid that market altogether.

Home country accreditation of awards is at least as important as local accreditation, and may even be more so, as it represents a passport to international job mobility.

Is our curriculum design appropriate?

Whether you choose to use existing, proven curricula or to develop new programmes for the local market depends on your marketing strategy and on the subject concerned. If students are to transfer seamlessly between international and home campuses, globally standardised curricula will be needed.

Curriculum design is critically important but is too often an afterthought in a campus start-up. It should drive decisions on physical plant (especially in the natural and applied sciences) and on faculty hiring (especially in the arts and social sciences). It should therefore be addressed very early in the planning of a transnational venture.

How will we recruit the right team?

Decisions on the mix of international and national staff and faculty will depend on the business model, the marketing strategy and the local regulatory environment.

For programmes delivered to part-time students, using flying faculty is a common and low-risk strategy. This model is especially common, and can be successful, for MBAs and other postgraduate programmes, but it presents greater challenges for full-time undergraduate programmes.

Recruiting expatriate faculty and staff is an expensive business. Many academics will see expatriate employment as a career-limiting move rather than an opportunity. An institution with an offshore presence must therefore incentivise faculty and staff to take on international assignments. However, even when top-class faculty do become involved in teaching internationally, the challenge is to get them to return on a regular basis.

When an investment is made in a major transnational venture, the local head of that venture needs skills comparable to those of a successful vice-chancellor or college president. These include diplomacy, public relations, fundraising and accreditation experience. The local head also needs excellent people skills to build a team of staff and faculty, blending expatriates, who may have a high turnover rate, with local nationals, who may be on a lower salary. Building a happy core faculty with low turnover is hard but essential.

How patient is the capital behind our proposed venture?

The costs of launching a new programme or campus will, of course, vary widely. Yet none should be expected to achieve financial sustainability in their first year or two. Many new campuses have failed because sponsors or investors have run out of money, patience or both.

While no two projects have identical cost structures, a good rule of thumb is to add two or three years to the length of the principal programme offered to give a minimum time for achieving a positive cash flow. This is very different from achieving a return on investment, which can be attained only after several more years. For example, a new transnational venture offering one-year transitional programmes or awards should budget for three or four years of (reducing) operating losses.

Do we have a sufficiently influential and committed home campus champion?

Whole-hearted institutional commitment is another critical success factor. A transnational venture of any kind must have a highly placed champion at home. Ideally this should be the president or vice-chancellor, to whom the head on any international campus should report as directly as possible, enhanced by regular exposure to (and visits from) the institution’s executive team. Pro vice-chancellors, faculty heads or other senior figures responsible for academic affairs play a particularly important role in ensuring that common standards are applied globally.

Even if a new transnational venture is limited initially to a single programme or award, institution-wide backing is important. Policies actively encouraging (and not merely grudgingly permitting) faculty and students to transfer to and from the international location are important, as is access from abroad to institutional assets such as libraries, IT support, pastoral care and careers guidance. This will mitigate the risk of the transnational venture being perceived as an “orphan” by its faculty and students.

In budgeting for the operating costs of a transnational venture, it is good practice to set aside funds for more travel costs than may at first appear strictly necessary. Bringing home campus staff to the new location, and newly hired local staff to the mother campus for familiarisation, is essential.

Although every opportunity is different, any institution embarking on a transnational education venture should, as far as possible, answer all these questions satisfactorily before any investment commitment is made.

Kevin Dunseath and Chris Hall are associates at Isis Enterprise, the technology and innovation management consultancy division of Oxford University Innovation. They have been closely involved in higher education in countries including the UK, the US, Saudi Arabia, the United Arab Emirates, Oman, Brunei, Rwanda, Albania and Kosovo. A full version of this article can be viewed here or by emailing Oxford University Innovation at enterprise@innovation.ox.ac.uk.