HESA

Higher Education Strategy Associates

Category Archives: international

February 24

Four Mega-Trends in International Higher Education – Catch-up is Hard

One of the perpetual alleged threats to cross-border education is that universities in the developing world might someday rival those in the west. Once that happens, the theory goes, students won’t need to go abroad and the whole international student thing goes up in smoke. It’s not an implausible theory, but it underplays how difficult catching up actually is.

The most basic problem for universities in developing countries is paying staff. Those talented and fortunate enough to have a terminal degree (this is by no means a given at universities in many countries), are often quite mobile. Salaries not high enough at Kenyan universities? Move to Tanzania, where salaries are higher? Not high enough in Tanzania? Try South Africa. Horizons not big enough in Johannesburg? There’s always New Zealand. And so on, and so on. It’s not quite a global market – more a series of overlapping regional ones. But the point is that institutions have to pay vastly over the odds in order to keep staff.

The gaps in national pay scales are huge. In Tanzania, a full professor makes about $3000 (US) per month. That may not sound like much, but it’s about 65 times the average private sector wage. A top academic could double that by heading to South Africa, but even that is roughly six times the average private sector wage. Move to Canada or Australia and it doubles again, even though here wages of topic academics are roughly three times the average private sector wage. To put all that another way: it takes the Tanzanian state twenty times as much financial effort in relative terms in order to pay its academics a quarter of what they’d earn in the west. Now, sure, not all Tanzanian academics would make it in Western universities. Yet that’s still the price required to keep talent at home. Financially, just staying in place is a killer; moving up the quality ladder is beyond most countries’ resources.

Even where top talent can be retained either through significant salaries, major research funds or linguistic barriers, the fact is that institutional prestige isn’t just a function of talent. As my friend Jamil Salmi says, it’s the product of talent, resources, governance (a critical missing factor in too many countries) – and above all, time. Prestige is a stock, not a flow. It comes from decades of consistent growth and excellence. Even if a new university pops up with billions of dollars and a few celebrity professors – say, the King Abdullah University of Science and Technology in Saudi Arabia or Nazarbayev University in Kazakhstan – that doesn’t mean it is instantly going to gain prestige.  In fact, to be more precise: it takes decades of having graduates with great careers before anyone will think an institution to be genuinely prestigious. And not many developing-world institutions can claim such things.

And in any case, prestige is a moving target. As I noted back here, the very nature of institutional prestige is changing, shifting from being a mainly research-based institution to a mainly economic-growth-catalysing institution. And as noted back here, it’s very difficult in many developing countries for universities t play such a role, first because they have few domestic technology-intensive businesses with whom to collaborate, and second because they rarely have either the academic culture or leadership to turn them in this new direction. There are a few – NUS in Singapore, KAIST and Pohang in Korea, some of the C9 in China – that can say this. Precious few others can.

What does that mean for international education?  Prestige – however you measure it – is a lagging indicator of economic growth, not a leading one. That means that even if economic catch-up of developing countries continues, it’s going to be a loooong time before the prestige of those countries’ universities matches those of those in developed countries. That doesn’t give developed-country universities a monopoly on international students by any means; south-south student mobility is an increasing percentage of all international student flows. But it does mean that quality/prestige will remain a source of competitive advantage for these institutions for many years – maybe even decades – to come.

February 03

Four Megatrends in International Higher Education: Massification

A few months ago I was asked to give a presentation about my thoughts on the “big trends” affecting international education. I thought it might be worth setting some of these thoughts to paper (so to speak), and so, every Friday for the next few weeks I’ll be looking one major trend in internationalization, and exploring its impact on Canadian PSE.

The first and most important mega-trend is the fact that all over the world, participation in higher education is going through the roof. Mostly, that’s due to growth in Asia which now hosts 56% of the world’s students, but substantial growth has been the norm around the world since 2000.  In Asia, student numbers have nearly tripled in that period (up 184%), but they also more than doubled (albeit from lower bases) in Latin America (123%) and Africa (114%), and even in North America numbers increased by 50%. Only in Europe, where several major countries have begun seeing real drops in enrolment thanks to changing demographics (most notably the Russian Federation), has the enrolment gain been small – a mere 20%.

Tertiary Enrolments by Continent, 1999-2014:

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Source: Unesco Institute of Statistics

Now, what does this have to do with the future of international higher education?  Well, back in the day, international students were seen as “overflow” – that is, students forced abroad because there were not enough educational opportunities in their own countries. Therefore, many people thought that the massification of higher education in Asia (and particularly China) would over the long run mean a decrease in internationalization because they would have more options to choose from at home.

Clearly the last decade and a half has put that idea to bed. Global enrolments have shot up, but international enrolments have risen even faster. But as all these national systems of higher education are undergoing massification, they are also undergoing stratification. That is to say: as higher education systems get larger, the positional advantage obtained simply from attending higher education declines, and the positional advantage to attending a specific, prestigious institution rises. And while higher education places are rising quickly around the world, the number of spaces in prestigious institutions is staying relatively steady in most countries (India, which is expanding its IIT system, is a partial exception). Take China for example; over the last 20 years, the number of new undergraduate students being admitted to Chinese universities has increased from about one and a half million to six million per year. In that same time, the intake of the country’s nine most prestigious universities  (the so-called “C-9”) has increased barely at all (it currently stands at something like 50,000 per year).

Now if you’re a student in a country where there’s a very tight bottleneck at the top of the prestige ladder, what do you do if you don’t quite make it to the top? Do you settle for a second-best university in your own country?  Or do you look for a second-best university in another country, preferably one where people speak English, and preferably one which has a little bit of cachet of its own? Assuming money is not a barrier (though it often is) the answer is a no-brainer: go abroad.

So when we look ahead to the future, as we think about what might affect student flows around the world, what we need to watch is not the rise of university or college places in places like China and India, but rather the ratio of prestige spaces to total spaces. As long as that ratio keeps falling – and there’s no evidence at the moment that this process will reverse itself anytime soon – expect the demand for international education to remain high.

September 14

The Canadian Way of Study Abroad

A few years ago, I think around the time that HESA Towers ran a conference on internationalization, I realized there was something weird about the way Canadian higher education institutions talked about study abroad.  They talked about it as helping students “bridge the gap between theory and practice”, “increasing engagement”, and “hands-on learning”.

That’s odd, I thought.  That sounds like experiential learning, not study abroad.  Which is when it hit me: in Canada, unlike virtually everywhere else in the world, study abroad to a large degree is experiential learning.

In Europe, when they say study abroad, they mostly mean study at a foreign institution in the same field through the Erasmus program.  In the US, they may mean this, or they may means studying in facilities owned by their home universities but located in different countries.  For instance, Wake Forest owns a campus in Venice, Webster University has a campus in Leiden, University of Dallas has one in Rome (have a browse through this list). Basically, if your students are paying megabucks to be at a US campus, the ideas can’t just give them exchange semesters at some foreign public school because who knows about the quality, the safety, etc.

But look at how Canadian institutions showcase their study abroad: McGill talks up its science station in Barbados.  University of Alberta showcases its international internships.  University of Saskatchewan has a fabulous little Nursing programs which ties together practicums in East Saskatoon and Mozambique.  The stuff we like to talk about doesn’t seem to actually involve study in the sense of being in a classroom, per se.  That’s not to say our universities don’t have typical study-abroad programs: we’ve got thousands of those.  They’re just not where the sizzle is.  It’s a distinctly Canadian take on the subject.

This brings me to a point about measuring the benefits of study abroad.  Let’s take it for granted that being abroad  for a while makes students more independent, outward-looking, able to problem-solve, etc.  What is it, exactly, about being abroad that actually makes you that way?  Is it sitting in classes in a foreign country?  Is it meeting foreign people in a foreign country?  Is it meeting people from your own culture in a foreign country (too often the main outcome of study abroad programs)?  What about if you actually get to work in a foreign country? And – crucially for the design of some programs – how long does it take for the benefits to kick in?  A week?  A month?  A year?  When do diminishing returns set in?

Despite study-abroad being a multi-billion dollar niche within higher education, we actually don’t know the answer to many of these questions.  There isn’t a lot of work done which picks apart the various elements of “study abroad” to look at relative impact.  There is some evidence from Elspeth Jones in the UK that many of the benefits actually kick in after as little as 2-4 weeks, which suggests there may be cheaper ways of achieving all these purported benefits.

Of course, one of the reasons we have no answers to this is that it’s pretty hard to unpack the “treatment” involved in study abroad.  You can’t, for instance, randomly assign people to a program that just sits in class, or force people to make friends among locals rather than among the study-abroad group.  But, for instance, it would be possible to look at impacts (using some of the techniques we talked about yesterday) based on length of study abroad period.  It would be possible to compare results of programs that have students mostly sit in class to ones where they do internships.  It would be possible to examine internships based on whether or not they actually made friends among local students or not, a question not asked enough in study evaluation work.  It would also be possible to examine this based on destination country: are the benefits higher or lower depending on proficiency in the destination country’s language?

These questions aren’t easily answerable at the level of an individual institution – the sample size on these would simply be too small.  But one could easily imagine a consortium of institutions agreeing to a common impact assessment strategy, each collecting and sharing data about students and also collectively collecting data on non-mobile students for comparative purposes (again, see yesterday’s blog), perhaps through the Canadian Undergraduate Survey Consortium.  It would make a heck of a project.

If anyone’s interested in starting a consortium on this, let me know.  Not only would it be fun, but it might help us actually design study abroad experiences in a more thoughtful, conscious and impactful way.  And we’d find out if the “Canadian Way” is more effective than more traditional approaches.

Worth a try, I think.

September 12

How Many Canadian Students Study Abroad? How Many Should?

If you look at the current issue of Policy Options, there is a startling claim made in the sub-headline of an article by Universities Australia CEO Belinda Robinson; namely, that “five times as many Australian undergraduates are studying abroad as their Canadian counterparts”.  It’s not a claim Robinson herself makes – it seems likely that it’s been added by the editorial staff at Policy Options.  The problem is it’s not correct.

The Canadian numbers come from a periodic survey Universities Canada does of its members on internationalization (the last example of this is here).  The last time they did the survey they found that 2.6% of students did a “for-credit” international experience, and another 0.5% did a non-credit course: total, 3.1%.  That’s if you believe universities can actually keep track of this stuff; my guess is there’s a substantial number who can’t or don’t capture this data well – particularly in those cases where students are arranging foreign experiences on their own, so this number is likely at least a bit of an undercount.

Now, in the aforementioned article Robinson noted that over 16% of Australian students had an overseas experience of some kind.  Someone, clearly, took that 16%, divided it by the Canadian 3% and voila!  Over 5 times more!  Except this is apples and oranges: the Canadian figure refers to students who go abroad in any given year while the Australian figure is the percentage who go abroad at some point in their career.   We don’t actually know what percentage of Canadian undergraduates go abroad over the course of their degree.  Back in the days when we HESA Towers used to run a national student panel, we found that 8% of current students (in the panel, at any rate, which was skewed to upper-year students and hence should come closer to the Australian picture) had had some kind of exchange experience.

(This is one of those things we could answer pretty easily if Statscan put a question about it in the NGS, or if CUSC put it in their tri-annual surveys of graduating students.  Hint hint.)

Wonky figures aside, Australia does seem to have been doing something right over the past few years, having quadrupled its out-bound student flow since 2000, and perhaps Canada should be emulating it.  But there is a genuine question here about what the “right” number of students going abroad.  What‘s should our target be?  I’ve seen serious commentators say we shouldn’t be looking at Australia, but rather Germany, where something like 30% of students go abroad at some point (actually, it’s 30% of “upper-year” students have gone abroad, based on a survey of students – on which measure Canada is, as noted earlier, about 8%).

This strikes me as a bit pie-in-the-sky.  For a German student, the marginal cost of studying elsewhere in the EU is fairly low; over two-thirds of undergraduates in Germany already live alone (source – the excellent Eurostudent website), and they have a host of potentially awesome international destinations within a couple of hundred dollars transportation fare by budget airline.  In Canada, a greater percentage of students live with their parents, so the average marginal cost is going to be higher, not to mention the fact that most of the international destinations we care about (we’re inconsistent about whether or not to call the US an “international experience”, mostly we mean Europe and Asia) are a couple of thousand dollars away, and unless you live in Toronto or Vancouver, the costs of living abroad on one’s own are likely to be somewhat higher than it is back here.   So it’s overall a much more expensive proposition for Canadians than Germans.

And what are the benefits of study abroad?  Anything that might justify the extra expense?  Well, I’ll get into this in some length over the next couple of days, but ask yourself: when’s the last time you heard about a recent graduate getting or losing a job because of having/not having an international experience?  Exactly.  Whatever you might be able to get a corporate exec to say re: the need for global competencies blah blah blah, Canadian employers, be they in the private or public sector, simply don’t seem to care that much about international experiences (lest you think I am being harsh on Canada and its complacency in international affairs, I urge everyone to read Andrea Mandell-Campbell’s book Why Mexicans Don’t Drink Molson.  Tl:dr: too often Canadians believe the hokey “The World Needs More Canada” line when in fact the reverse is usually true).

I think it will be hard to make the financial case for raising our rate of outbound mobility, simply because neither students nor governments will put money into this kind of project if there aren’t clear signals from the labour market that the return will balance the expense.  Instead, study abroad will remain what it too often is now: a holiday somewhere nice.  For all the talk of study abroad as an inter-cultural experience, it is striking how many students take their study abroad in the US, the UK, Australia or France: in cultures not dissimilar from their own.

So how can we measure and sell the benefits of study abroad?  Tune in tomorrow.

August 03

A tipping point for internationalization?

Over the last few years, my position about internationalization has been pretty consistent: the international student market is going to grow and grow.  Talk about a China bubble – one of the education press’s favourite “what-if?” doom and gloom scenarios – is almost invariably overstated.  Yes, political instability in a place might China might occur, but Chinese parents think of having students overseas as an insurance policy, a way to get out if need be – so frankly if anything political instability there is likely to increase study abroad, not decrease it.  Fears about an economic contraction affecting internationalization?  We just had a Great Recession and international student numbers climbed right around the world.

The only thing that I think really stands in the way of continued growth in international student numbers is a major disruption in the international economic/political order, something on the scale of a major war, say.  And until now I’ve been pretty confident that this isn’t in the offing.  But after the summer of 2016, I’m not so sure anymore: turns out there are ways to effectively poison the prevailing economic/political order short of war.

To me, there are six big things going on right now which individually might not matter much but taken together signal real change: Brexit, the Syrian refugee crisis, the Turkish coup, Trumpism, the French election and the creeping cult of Xi Jinping.  None of these phenomenon do much to change outbound student-mobility at a global level in the short term.  Brexit might reduce foreign demand for UK education, but those people have options elsewhere; the Turkish coup, if anything, gives a boost to internationalization because there are going to be a *lot* of secular-minded students looking for an exit.  But in the medium term, it’s possible these changes herald a very different kind of world than the one we have grown used to.

Internationalization in higher education depends in large part on the notion that mobility – and not just study mobility but life mobility – is desirable.  If you’re a kid from an aspiring middle-class family in Buenos Aires or Beirut or Beijing, you want the foreign degree partly because the institution you might attend is better/more prestigious than the education might get at home, and partly because you think your degree will make you more valuable to a wider set of employers.  But if laws emerge which constrain businesses from hiring across national borders, that poses a serious challenge to the logic behind internationalization.

Trumpism and Brexit are both expressions of ugly nativism and herald exactly such a challenge.  Though they may not play out completely (Brexit may not happen, Trump likely won’t win the general election) they certainly suggest that the twin anglo-saxon motors of globalization are much less keen on immigration than they were.  The French election, which Marine LePen is now given a reasonable chance of winning, could see this momentum carried through to another major G-7 country.  The Schengen agreement is still wobbly thanks to the refugee crisis and Europe’s mostly short-sighted reaction to it and mobility within Europe may will be curtailed at some point.  In the developed world, where we used to see immigration in terms of doors and bridges between nations, increasingly we see only walls.  This is not good.

And that’s just what’s going on in developed countries.  The aftermath of the Turkish coup attempt has freed President Erdogan’s most authoritarian tendencies, resulting in a wholesale attack on universities and academics.  In China, universities are being purged of “western influences.”  In themselves, neither of these are going to reduce student flows; but in both cases you see major countries adopting more nationalist positions, and being more restrictive of press freedoms and freedoms of speech.  These spaces are becoming less open to the world, not more.  These are not conditions in which it seems likely that employers  will enthusiastically welcome students who have gone abroad for their education.

Put all that together, we could be going back to a pre-1989 world where the nation-state is much more powerful and paternalist and where individual mobility – at least, beyond simple tourism – is much more restricted than it is today.  Some people, I am sure, would welcome such a world.  Personally, I think it would be a disaster and a huge step backwards for progress and freedom.  Where universities are concerned it would be a disaster because it would erode the foundations of internationalization and student mobility.

I’m not saying this will all happen; a slow-down in the move towards globalization still seems more likely than an out-right reversal of it.  But this summer’s events make me much less confident about this than I have been at any time in the last thirty years.  Institutions with major stakes in internationalization would be wise to do some contingency planning.

July 14

Brexit

Morning, all.

Everyone’s writing a Brexit thinkpiece these days.  Literally, everyone.  I’m feeling left out.  So here’s mine.

1) Brexit isn’t a foregone conclusion.  Yes, Leave won 52% of a non-binding referendum based on a pack of lies about the results of future negotiations that would make the PQ blush.  But the UK government has yet to invoke Article 50, the clause in the EU constitution that signals a 2-year countdown to departure, and will certainly not do so until a new PM is chosen.They may not do so until after the French and German elections next year, and as the realities of negotiating a divorce sink in they may never do so (and – irony of ironies, there are not enough trade lawyers in the UK to negotiate such deals, so they are having to import them ) .  Even if they do start negotiations, the final settlement may be so far from the Leave fairytale that there would almost certainly be a huge demand for a second referendum before ratification.  So all this handwringing may be for naught.

2) Even if Brexit doesn’t happen, this episode can cause a lot of damage.  The UK hasn’t been booted out of the Erasmus student mobility program yet, but with racist incidents up 500% since the vote, you can bet there will fewer European students thinking London is a place they’ll feel secure.  The UK hasn’t been booted out of the Horizon 2020 European research scheme yet, but multi-national scientific teams have been pulling UK researchers’ names from their proposals in anticipation of Brexit.  And the idea that the UK will make up for the drop in funding?  Good luck with that.  Paradoxically, the longer the uncertainty about Brexit, the less likely the UK will actually pull the trigger; but conversely, the longer they wait, the greater the damage will be.

3) What will happen to International student flows?  Now this is where it gets tricky.  A lot of the focus right now is on EU students, and the fear that they won’t come to the UK because they will have to pay international student fees instead of domestic ones.  But domestic fees are already pretty high (and in humanities and social sciences are set well above the cost of delivery). If universities want to keep those students they could always grant concessionary fees to EU students and keep them paying exactly what they’re paying right now.  No, I think the real issue with EU students has to do with whether students still think the UK is a place they want to spend a part of their lives.  Lots of them now go assuming they can stay and work there: no more.  But it’s not clear that countries like Canada or Australia would be able to pick up on this loss.  If the point of going to London was because it was a “destination” rather than simply a chance to learn English, it’s not obvious that Melbourne or Toronto would be a satisfactory second choice.

It’s the same with non-EU students: you might think that there would be a lot of non-EU students who might be dissuaded from going either because of increasing incidence of racism or because London was no longer a way into the EU.  Since the Tories took power it’s been increasingly difficult for graduating students to immigrate anyway, so it’s unlikely to be the latter: Teresa May’s immigration saw that lot off years ago.  But the racism/intolerance thing?  That’s a vulnerability.

4) Can Canadian universities and colleges cash in on this?  Yes. Advertise a lot in Asian markets where UK currently does well.  Emphasize security and multiculturalism.  Talk about possibilities for immigration.  And do it fast, because odds are the Aussies are already there doing it.

Hope you’re all having a good summer.

May 18

Canadian B-Schools and Economic Growth

If there is one thing university Presidents desire, it is to be useful to society – and preferably to the government of the day, too.  After all, post-Humboldt, universities exist to strengthen the state.  The better a university does that, the more it will be appreciated and, hopefully, the better funded it will be.  So it has always struck me as a bit odd how little universities (an business schools in particular) have really done in order to help work on the causes of Canada’s perennially sluggish economy.

Canada’s fundamental economic problem is that outside the resource sector, companies struggle to reach scale.  Outside the oligopolistic telecoms and banking sectors, we are a nation of small and medium businesses.  Judging by the party manifestos in last year’s elections, many people like things that way.  Small businesses are good and deserving of lower tax rates, big businesses are bad and deserve to be taxed more heavily. 

The problem with this little story is that it is simply wrong.  Big businesses are crucial to innovation and hence to economic growth.  Big businesses are the ones that have the money to invest in R & D.  They are the ones that can make long-terms commitments to training employees (if you don’t think firm size plays a role in Germany’s ability to sustain its apprenticeship system, you aren’t paying attention). People may be rightly cautious about the power of capital and its influence on the political process; but that doesn’t mean we shouldn’t encourage the formation of large companies in the first place.  Ask the Swedes: their social democracy would never have existed without very large companies like Volvo, Saab and Ikea.

And so the key question is: why don’t we have bigger domestic companies in Canada?  Oh sure, we have the occasional behemoth (i.e., Nortel, RIM) but we don’t seem to do it in a non-ephemeral way, or do it across the board.  And when our companies do start getting big, they often sell out to foreign companies.

We can point fingers in a whole bunch of directions – one favorite is a lack of appropriate venture capital.  But to a considerable degree, it’s a question of management.  Universities like to talk about how they are teaching entrepreneurship but getting people to start businesses and getting those businesses to grow are two very different propositions.  We seem not to have a lot of managers who can take companies from their first million in sales to their first ten million in sales, or to take our businesses out of the Canadian context and into a global one (if you haven’t yet read Andrea Mandel-Campbell’s Why Mexicans Don’t Drink Molson, on this subject, do – it’s revealing).   And for that matter, how is it that our venture capital industry still seems more comfortable with mining projects than life science or biotech?

Can it be – say it softly – a question of education?

We pretend that success in innovation is a function of prowess in tech.  But to a large degree, it’s a function of management prowess: how can staff be better motivated, how can processes be changed to add value, how well can business or investment opportunities be spotted.  Might it be that the education of our business elite doesn’t include the right training to do these things? 

To be clear here, I don’t really have any evidence about this one way or the other.  No one does.  But if I were a university president, or a business dean, it’s a question I’d be asking myself.  Because if there’s an economic conundrum that needs solving its this one, and if there’s any way in which universities can contribute, they should.

April 07

Innovation to Watch at the University of Sydney

Australian universities seem to do “Big Change” a lot better than universities elsewhere.  A few years ago, the University of Melbourne radically overhauled its entire curriculum in the space of about two years partly to create a more North American-like distinction between undergraduate and professional degrees and partly to reduce degree clutter by winnowing the number of different degrees from over a hundred to just six.  (For a refresher, I wrote about this back here).

If you read press reports about the University of Sydney’s new strategic plan (read the full document here,  it’s completely worth it) you might think Sydney is just aping Melbourne: it’s culling of degrees from 120 to 20, mostly by wiping out five-year “double degrees”, and also reducing the number of faculties from 16 to 6.

But the reduction in the number of degrees is actually a much less interesting story than what Sydney plans to do in terms of its curriculum.  From 2018, every program is to have two courses in third-year: one to integrate and apply disciplinary skills and another to apply disciplinary knowledge and skills in context.  Every degree will culminate in a final-year project or practicum.  Every program will have cultural competency embedded within it, and support for international studies will rise so that (hopefully) the proportion of students with an international experience will rise from 19% to 50%.  A strong framework to support career transitions will also be set up. Involving both curricular and co-curricular efforts

Here’s the most interesting bit: And an entirely new “open learning environment” will be created within the university, which will provide short, on-demand courses in areas such as entrepreneurship, ethics, project management, leadership (you know, all the employability-related skills universities usually claim students pick up by osmosis).  Some of these courses will be online, while some will be blended online/workshop; some will be non-credit and some will be small-credit. 

Did I mention they are going to develop a university-wide approach to measuring how desired graduate qualities such as disciplinary depth, interdisciplinary effectiveness, communication ability and cultural competence have been attained?  Yes, really.

What makes this kind of change deeply impressive – and potentially highly significant – is that it is not coming from a second-tier, ambitious institution trying to catch attention by doing something new.  This is the country’s oldest university.  This is a big, old prestigious institution taking big serious steps to actually change the undergraduate degree structure in order to provide students with better skills without sacrificing academic rigour.  It’s a research university that cares enough about undergraduate learning outcomes that it will measure them in some way beyond graduation rates and immediate employment rates. 

This is cutting edge stuff.  It may even be a world first.  We should all hope it is not the last; this kind of approach needs to spread quickly.

March 11

How Much is a Brand Worth? Evidence from Doha

The Washington Post had an absolutely fascinating article earlier this week regarding the sums that the Government of Qatar is paying various American universities to be part of its set up at Education City.

For those who are unfamiliar with Education City, a slight diversion.  About 15 years ago the Qatari royal family got frustrated with the state of local education and hit on the idea of creating a world-class educational facility by inviting top US universities to come in and each run one faculty.  So Virginia Commonwealth was invited to set up a visual arts school, Georgetown came in to run the school for the foreign service, Weill Cornell did the medical school, etc.  (Northwestern, Carnegie Mellon, and Texas A&M also have campuses there).

Now this wasn’t your typical branch campus arrangement.  These institutions were not over there to make money by offering degrees for high prices.  Rather, the Qatari Royal Family was paying them big dollars to educate their students in situ (there’s a similar arrangement in place for the NYU and Sorbonne campuses in Abu Dhabi).  The universities themselves had nothing at risk: each one received its own gorgeous building fully paid for by the Qataris.

But nobody knew exactly how much they were getting until the WaPo article this week.  Using tax records, Department of Education data and freedom of information requests, the paper managed to lift the veil on the financial arrangements.  As it turns out, the Qataris are paying them, collectively, just under $405 million per year to operate their Doha campuses.  Weill Cornell rakes in the most (hey it’s a medical school) at $121.7 million, and Virginia Commonwealth the least at $41.8 million.

On their own, these are eye-watering figures.  But to truly get a sense of how insane this is, you have to look at what this translates to in per-student terms.  These are actually pretty small operations – according to the data I was able to piece together the six campuses collectively only educate about 2000 students.  So the actual expenditure per student is actually just over $205,000. 

Qatari Government Expenditure per Student, Education City Campuses

ottsyd 20160310 Doha Brand

In other words, these schools are making out like absolute bandits.  Free buildings, six figure per student incomes – this is heaven.  But the question really is what on earth possessed the Qataris to pay this kind of price?

It’s instructive here to look at what the Qataris are paying the College of the North Atlantic to run their community college a few kilometers away from Education City.  It’s the same deal – Qataris built the campus and pay an annual fee to CONA to run the place.  Details on the post-2013 CONA contract are scarce, but the first ten-year contract was worth $500 million so let’s just say it’s worth $50 million/year (the CONA Annual report gives figures in the $10-11M range, but I’m fairly sure that’s profit not operating).  But CONA educates more students than all the Education City campuses combined: with roughly 3000 in total – I make that out to be $16,500 or so per year – or about an eighth of what the cheapest institute at Education City is getting.

Now obviously, that’s not a bad deal for CONA (In comparison, the college receives about $84 mil in provincial grant in aid and tuition to educate its 8888 students in regular programming back in Newfoundland, which comes to about $9400/student), and obviously there are some differences in delivery costs for college and university programs, but they aren’t that big.  Georgetown’s campus is a pure social sciences operation, and at Canadian universities those rarely cost more than $15,000/student.  So where’s that extra money going?

Well, to student amenities, partly.  These places are like little educational wonderlands(check out Georgetown’s student life page).    But mostly, this is pure rent.  Unlike CONA, these American institutions have global prestige.  And that in a nutshell is what the Qataris are paying hundreds of millions a year for – the right to be associated with these institutions’ prestige.

That’s what brand is all about.  And apparently, it’s worth up to a couple of hundred thousand dollars per student.  Nice work if you can get it.

March 09

Better Know a Higher Education System: Jordan

I’ve had occasion recently to take a deeper look at higher education in a couple of Arab states, and one system I’ve found to be especially fascinating is that of the Hashemite Kingdom of Jordan.

Jordan is a middle-income country (gdp/capita = $12,000 or so), but one with a lot of problems on its hands.  Not only is it dealing with a multi-million refugee flow from neighbouring Syria, it has also lost a huge amount of remittance income as low oil prices have hit the Gulf.  So there isn’t a lot of money for higher education: in fact, public expenditure on higher education is only about 0.3% of GDP, which makes it one of the lowest-spending governments in the world as far as higher education is concerned (the Gulf States are lower but they are spending off a much lower base and of course are only concerned with educating a small fraction of their population).

So you’d kind of expect higher education there to be a shambles.  Except it’s not.  It has participation rates that are right about average for a country at that level of development.  Compared to most OECD countries, it is heavy on science and technology programs – its distribution of students by field of study looks more like Korea or Germany than it does like Canada or France.  Among Arab countries it has a relatively high research profile and almost alone among countries with GDP/capita under $15,000, it places two universities in the Times Higher Education top 800 rankings.

How does it manage all this?  Simple: tuition fees.

All Jordanian student pay tuition.  Under the restrictive way students enter university, the students who do best on their high school exams get their pick of programs at the more prestigious public universities at below-cost rates (about US $1650).  Poorer performing students simply get assigned to wherever there is space.  If they don’t like it and want to study something else, they have to pay a higher price (often  around US $4000) at public universities, or they head to one of the private universities (between $4000 and $5000).  Add all this together and what you get is a country which devotes a little over 2% of GDP to higher education in the form of tuition fees.  That puts Jordan in some pretty rarified territory since only Chile and South Korea have ever hit this level (both are slightly lower than that today).  And in total it means that the tertiary ed sector in Jordan receives about as much in GDP terms as Canada’s does.

Total (Public & Private) Spending on Tertiary Institutions, as a Percentage of GDP, selected countries, 2011 or latest

JordanSpending

Now, what’s a little odd about the Jordanian system is that it has achieved this while keeping the higher education system mostly in the hands of public universities.  There are private universities but they only educate about a quarter of all students – in both Chile and South Korea, private institutions educate about 80% of tertiary students.  So Jordan is somewhat sui generis as a developing country where public universities are essentially privately funded.

It’s also sui generis in that it has no functioning system of student aid beyond a few scattered scholarships.  All these costs are being borne directly by families, without the help of any student loan program or system of fee waivers for poorer Jordanians.  Although there are no studies on how this situation is affecting access to Jordanian universities, it’s reasonable to assume that the barrier is a pretty severe one and that the system as a whole would be much better off with a decent system of loans and grants.

But of course that would mean making new government investments in an area which allows the cost burden to be shifted but doesn’t directly help universities.  And universities keep clamouring for more money (as they usually do).  That may seem a bit ungrateful in a country which is among the world leaders in university income, but of course since they operate in an international environment, they are paying world prices for scientific equipment and libraries, and above-the-odds in local term for academics as well.  Simply put, 2.4% of GDP doesn’t go as far in Jordan as it does here.  And so they clamor for more.

Jordan’s going through a rough period right now and the likelihood of a lot more public money showing up anytime soon is pretty remote.  So development, if it occurs, is going to have to happen through judicious management of what effectively is a system entirely dependent on fee-paying students, just like South Africa and Chile did. 

It’s an experiment that bears watching.  And it’s another reminder that in some contexts at least, tuition fees are what create educational opportunities, not deter them.

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