TNE can be successful when it’s taken on as a strategic agenda, not a quick fix
The newly refreshed international education strategy makes much of the potential for expansion of transnational education (TNE). Minister for skills Jacqui Smith suggested that overseas expansion could form a key part of UK universities’ strategy for developing sustainable business models in the face of financial challenge.
From the government’s perspective UK universities undertaking transnational education achieves a number of critical policy objectives. UK education – especially higher education – is an enormous “soft power” asset, and helps to open doors to bilateral discussions with friendly overseas governments who see the UK as a partner in their education development objectives. The research and innovation partnerships that TNE facilitates contribute to the government’s R&D agenda and industrial strategy. There’s a clear tie-in with Labour’s “opportunity mission” in the language of the international education strategy, advocating for the provision of UK education opportunities in-country, and committing to the global expansion of education opportunity for women and girls.
TNE is not gold mining
The category of TNE covers a lot of different kinds of overseas provision, from the “gold standard” overseas campus to the lighter-touch validation arrangement. UK institutions have operated successfully across the full gamut of provision. But in the current moment KPMG can see an emerging risk that institutions, with the tacit support of government, pursue TNE opportunities in the hopes that these will plug short-term gaps in income, rather than as part of a considered strategy of internationalisation. This approach bakes in a level of dependence that could leave those institutions vulnerable if, for example, the overseas partner seeks to change the parameters of the contract at short notice or puts pressure on the UK institution to make commitments at a pace that does not leave space for adequate due diligence.
KPMG colleagues have also noticed that some overseas providers – as distinct from their governments – seem keener to work with private providers based in the UK rather than traditional UK universities. While there’s nothing actively problematic about that, it tells us something about the extent to which the UK HE ecosystem is geared up to expand TNE and the incentives operating in this space. The hope may be that business and commercial interests can coincide with broad global development goals and national foreign policy interests but there’s no guarantee that turns out to be the case.
Where internationalisation forms part of a wider sustainability strategy, institutions may need to rapidly develop strategic capability to scope, risk-assess, and realise value from transnational education. International governments see an opportunity to grow UK education provision in-country, increasing access to what remains a globally admired system, and benefiting from an inflow of international students attracted by the opportunity to study UK degrees in countries that are less costly to study in. As the UK seeks to reduce its dependence on China, including in education exports, these governments may pursue a policy and regulatory environment that is pro-TNE and pro-international recruitment, including through measures like extended opportunities for post-study work. While this policy position has the advantage of being both enlightened and pragmatic, it also opens up space for rogue actors to flourish.
Careful identification of countries that are open to partnering with the UK and where there is a synergy in cultural attitudes and values towards education is a baseline necessity – this is work that government, the British Council and Universities UK International support very effectively. But when it comes down to identifying potential partners and developing a plan of action every institution must be confident that it can undertake the necessary due diligence and resource the development of the intended new provision.
Lessons from new campuses in India
The University of Bristol and the University of Southampton have each recently opened a new campus in Mumbai and Delhi respectively, and we spoke to senior colleagues in each institution to learn from those experiences. As highly regarded research-intensive universities both Bristol and Southampton are not short of offers from prospective international partners. For both institutions, the opportunity to set up an autonomous campus following a change of regulation in India in 2023 aligned well with broader internationalisation intentions. But it also meant that to stay ahead of potential competitors in other countries such as Australia and Hong Kong, pace was of the essence.
Our strategic rationale is very straightforward and is primarily about education, partnership and strengthening our international positioning and reputation,” says Michele Acuto, pro vice chancellor for global engagement at Bristol. “India is an obvious partner for us in terms of opportunities for two‑way mobility, shared research agendas that our staff are already engaged with, and its strong higher education reputation.”
For Bristol, the Mumbai Enterprise Campus represents a new and significant step in global education as part of a broader internationalisation agenda and strategy. At Southampton, TNE is well established, including a campus in Malaysia. Kieron Broadhead, Deputy Vice President Operations at Southampton explains that the university’s approach to developing TNE is “strategic, not opportunistic – we’re aiming to find alignment of cultures, research, and student experience. For us it’s about scaleability and economies of scale, but it’s also about our global reputation, and whether something contributes to our ability to be a genuinely global university.”
By “genuinely” Kieron is clear that he means undertaking international activity that contributes to the university’s central teaching and research mission in interesting ways – for example, there’s an idea that a student might, in time, be able to study across the campuses in Delhi, Malaysia and Southampton in pursuit of a single qualification. Similarly, the expectation is that over time a research agenda will emerge in Delhi that is aligned with expertise that Southampton already holds and that speaks to challenges facing India with issues like water, energy and environmental sustainability.
“If you look at the literature on TNE, it’s very clear what factors cause overseas campuses to fail,” says Michele Acuto. “Problems arise when a campus becomes isolated, is perceived as second‑rate, or is seen as attached to only one part of a university rather than embedded within a whole‑university strategy.”
For both institutions, the opening of a new campus was approached (and resourced) as a major strategic project, including significant work with boards of governors to understand the scope of the opportunity and the scale of the risks involved. Both benefitted from senior leadership of internationalisation at exec level who could draw from personal experience of setting up overseas campuses.
“We held several in‑depth discussions with our Board, bringing as much evidence as we could on our options and learning from sector experience,” says Lucinda Parr, chief operating officer and registrar at Bristol. “Our Board understands the shifting international landscape and the pressures facing the UK higher education sector but also needs assurance that we are managing risk responsibly. So, we carried out careful market testing and cross‑referenced faculty capability and demand in key areas. We also took steps to ensure we had the capacity required to deliver the project effectively.”
“We took a measured view on the risk profile that comes with being one of the first to do something against the opportunity to be an actor in one of the world’s biggest education ecosystems,” says Kieron Broadhead. “And we took a very transparent approach with our board. At the point at which we submitted the concept we pulled together a sub-group of Council including the chair of Council, chair of audit and risk committee, the lead for international and the treasurer and worked with them on the business case. They helped keep us on the right track and asked all the questions you would hope they would ask, and it meant the board never felt ‘unsighted’ on the project.”
Both institutions reflect that the input of resource – mostly in the form of person-hours, has been significant. “Nobody should underestimate the importance of having people on the ground for a project of this scale,” says Lucinda Parr. “Success isn’t only measured in student numbers but in our relationships with local government, partners and industry, and in the regional impact and influence we build. We’re working closely with the team appointed to manage the campus, focusing on co‑building the model and establishing shared governance to achieve a collective ambition whilst reducing any risk of drift.”
“Our vice chancellor and vice president international have a sensible approach to strategic projects so they resourced it properly,” reflects Kieron Broadhead. “Including pretty much all of my focus for the duration of the set up phase, plus our director for student life was seconded out to Delhi for six months. And we had to pull in lots of additional resource on building programmes, internal quality assurance, marketing, all at pace. At one point I’d say we had around 50 people working on it as a substantive part of their role.”
Thinking it through
While not every UK institution will be looking to open an overseas campus, in India or elsewhere, there are key insights here about ensuring strategic alignment with institutional mission, deployment of experienced senior staff who are familiar with the landscape, intensive assessment of the business case and associated risks, and appropriate investment in getting projects up and running.
Just because a comparator institution appears to be becoming more active in TNE, does not mean that another institution should. What’s right for one institution may not be right for another, and any strategic agenda should start with data-led analysis of each potential market and your own institution’s unique academic offering, research goals and operating environment.
In taking forward TNE as part of an internationalisation strategy, defining a preferred operating model early and agreeing its core components at the outset will inform set-up and operating requirements, feed crucial costing information into the business case and help select the right partner when the time comes. Decision-making during set up will be a lot easier if there is a clear and agreed operating model you are working towards.
When considering the resource implications of any given TNE project, the longer term prospective returns have to be balanced with the initial setup workload, which is likely to be substantial. KPMG advises clients to map out the end-to-end regulatory, tax and legal set-up pathway, covering everything from registration, banking, local filings, and compliance in-country, as well as implications in the UK, to avoid pitfalls once an institution has already committed. Specialist in-country insight will support realistic and data-led decision-making that avoids “headline” market traps.
Finally, think about the exit strategy. While no one wants to go into a marriage thinking about divorce, it’s important that institutions understand what they are tying themselves into and how they can extricate themselves should they need to – considering the reputational implications as well as the financial ones.
Be part of Team UK
Seeking advice is critical, especially where there is a maturity gap in TNE experience and capability. The thing to keep in mind is that there is more at stake in this work than any single institution’s success; as Kieron Broadhead told us: “The UK will win if we are good at this, but we won’t win if only some of us are.” That message seems to have cut through to government given that, rather than fostering a TNE zero-sum arms race among UK institutions, the international education strategy proposes a more collaborative approach in which institutions share market intelligence and seek to grow collective revenue.
“We are looking to work more closely with our colleagues across the UK sector to benefit from stronger collective insight,” says Michele Acuto. “There is real value in sharing intelligence about global education markets, learning across institutions about the application of UK policy in TNE contexts, and working together where appropriate to support the UK’s broader international engagement.”
With the right collective will and insight, and a government commitment to support, there’s no guarantee that every institution will find a financial survival strategy in TNE – but there is opportunity there for those who are prepared to commit to meaningful international partnerships for the long term.
This article is published as part of our partnership with KPMG.
