International branch campuses: this is the year to hit “pause” before “go”

The last couple of years have witnessed a rush of international branch campus openings (or other types of “foreign education outpost”). Already, some of these initiatives have met with great success; others less so. Cumulatively, they are providing a sense of what is likely to happen in this area of internationalisation as well as a set of hard-won best practices for those institutions considering if, how, and where to branch out.

The state of expansion today

The ways in which higher education institutions can expand their brands overseas today are diverse. There are twinning arrangements, branch campuses, subsidiary institutions, as well as research outposts and other forms of multinational arrangement (a good summary of different models can be found here). And online delivery models - including MOOCs - have made it possible for some international students to never set foot on any campus – overseas or located in the home country – but to nevertheless graduate with a foreign degree. On the one hand, this is good news: more students in more countries, in various states of financial ability, are now able to access a “foreign” degree due to the proliferation of internationalisation models. But on the other hand, the power and prestige of foreign degrees are under pressure in some countries given the sheer volume of offerings in the marketplace.

Branching out is more of a high-stakes game than it may have initially seemed

As we noted in our article, “The new branch campus model: expand at home, compete everywhere,” the year 2012 was:

“… a year of disruption, a year when every institution – whether elite, niche, public, private, large or small – has been encouraged to consider its operations and programmes …. One apparent result of all this is that institutions are showing more interest in extending their brands to target more student segments or more markets …. through a variety of subsidiary operations or partnerships.”

Over the last few years it has seemed logical for an internationally minded university to branch out with one form or another of branded school in a foreign country. The reasons were manifold:

• Everyone seemed to be doing it
• Certain governments have been literally throwing money and state-of-the-art facilities at select schools to locate there to help them grow their economies or reputation as education hubs (e.g., Singapore, Dubai)
• International student demand has seemed to justify it
• State funding in the US is alarmingly constrained, necessitating new revenue sources
• Technology is facilitating more types of delivery models
• The brand might be enhanced and carried geographically farther by the initiative, with long-term consequences (e.g., undergraduate students studying at a branch campus moving on to graduate studies at the main campus)

But there are potential challenges that bear thinking about before embarking on an international endeavor – and institutions’ growing recognition of these may well set the stage for new approaches to international campuses in 2013. Potential challenges include:

• Maintaining enough focus on the home campus while devoting resources to the international expansion - including ensuring that home campus faculty are on board with any expansion plans
• Establishing quality control measures at branch country campuses to make sure the brand is not diminished in any way and that foreign students are getting a quality education
• Coming up with a model that retains enough of the main institutional brand to seem prestigious to foreign students yet which is properly tailored to suit realities in the branch campus country
• Competing amid a more cluttered field of international players - some of high quality and some less scrupulous - and distinguishing the brand to students potentially overwhelmed with so many choices
• Ensuring there is long-term demand for the programmes offered in twinning arrangements, branch schools, or subsidiary institutes - many of the branch universities that have failed to date have done so due to low enrolments
• Getting a firm handle on foreign regulations to make sure there is indeed a pathway for a branch campus to happen

With regard to the last bullet, we highlight the current case of Canadian York University, which is intending to open a branch campus of Schulich School of Business in Hyderabad, India. University Affairs reports that “The school was set to open in September, but prolonged delays by India’s parliament in passing proposed legislation to allow foreign universities to operate branch campuses there have raised questions about the project.” (For more information on that legislation, see our article "Indian government puts foreign university legislation on the shelf.") Another important consideration for the internationally-minded school considering expansion is that it is not necessarily a guarantee to make money. Cristine Ennew, underlining the danger of the UK’s immigration policies as they pertain to international students coming to study in the country, points out the differences between internationalising at home versus by branch campus expansion on the Global Higher Ed blog:

“[International] students generate significant export earnings through the fees that they pay (perhaps as much as £8 billion annually) and provide an additional economic impact through their spending while studying in the UK …. [By contrast] International campuses receive their income within the country in which they operate and incur most of their costs in that same location. Financially, they are substantially based in their host economy. Almost by definition then, there will be relatively low income flows back to the home country.”

Potential for financial losses as well as rewards

International campuses can also end up doing the exact opposite of what they were set up to do: they can damage the institutional brand and result in financial losses. In Singapore, Tisch Asia, the graduate film and creative arts school that is a branch of New York University’s Tisch School of the Arts has just announced that it will close (likely in 2014) as a result of financial pressures. The school opened in 2007 as part of Singapore’s Global School House Programme that invites prestigious schools to set up branch campuses as part of the effort to make Singapore a global education hub. The Singaporean government is said to be very embarrassed by the school’s decline and “were examining the reasons for its failure, hoping to refine their strategy for inviting and retaining top international institutions.” Current Tisch Asia students are said to be unsure about their future; some of them may complete their studies at the main New York Tisch campus. A University World News article notes of the Tisch Asia demise: “Experts in Singapore said the problem lay with a flawed business model, based on offering the same as what it offered students in New York, at New York prices." They quote Kirpal Singh, an associate professor of English literature and creative thinking at Singapore Management University, as saying:

“It is important to note that the cost of Tisch in Singapore was not cheap – it is almost the same as New York. But given that Singapore is not New York, any parent would prefer to send their children to New York to experience the vibrancy of a global arts city.”

Kirpal also commented that Tisch Asia was spending too much money on “paying for Tisch academics in Singapore” rather than a more cost-effective practice of sourcing academics from Singapore itself. Then there is the Canadian University of Waterloo: it has just announced that it is closing its satellite campus in the United Arab Emirates due to low enrolments. Ellen Réthoré, Waterloo’s associate vice president, communications and public affairs noted to University Affairs that while students at the Dubai campus were “generally pleased,” some said the main Waterloo campus was superior “because it’s bigger and there are more things that appeal to students there.”

Again: a similarity with the Tisch example, where the branch model is seen by students to be missing something because it does not involve the excitement of the study abroad experience.

In addition, the University of Waterloo branch campus was plagued by other problems related to its model; Jean-Jacques Van Vlasselaer, Waterloo’s interim associate vice president, international, said to University Affairs that:

“The Dubai initiative didn’t meet the ‘central strategic goals and expectations’ of Waterloo and its Dubai partner, the Higher Colleges of Technology.”

He noted on the Waterloo website that the university is “exploring a more strategic approach, with a stronger focus on advanced studies, and research and innovation.” The University Affairs article also points to two other universities that have pulled out of the region in recent years: “Michigan State University closed its branch campus in Dubai two years ago, also because of low enrolment, and George Mason University pulled out of the UAE in 2009.”

The road to success is paved with quality

As much pause as the preceding sections argue for, there are very exciting and positive examples out there suggesting good practices for international expansion. Branch campus activity in Malaysia, in particular, is noteworthy for how carefully it is proceeding. A University World News article points out that there are still only six branch campuses in the country, and that the government is eager to attract more, but will only court the best and has “not been keen to throw money at the concept, letting market forces play out.” Malaysia wants to become an education hub in the near future, and it is taking the slow and steady approach to make sure it happens with quality as the foremost consideration. Quality may in fact be the key word as it relates to international expansion within the higher ed sector this year. The Chronicle of Higher Education recently predicted “5 International Trends for 2013.” Number 3 was this one: “A shift from expansion to quality” - including increased use of international rankings by foreign countries to determine which institutions to let in, more efforts by institutions to improve the quality of education at branch campuses, and more quality assurance oversight in general.