Credit Crunch spells boom or bust for universities, conference told

As recession takes hold around the world, big wins or substantial losses are equally possible for universities in Britain that rely increasingly on international student fees to prop up their finances.

A debate led by Sir Jonathan Dimbleby at the British Council’s two-day flagship Going Global conference in London will consider how universities should respond to the situation.

Leading economists and educationalists participating in the debate will take into account the findings of new research commissioned and conducted by the British Council into current and likely future trends in the flow of students to and from key markets such as China and India.

Past experience points to demand for higher education increasing during an economic downturn as more people seek to ride out the recession by studying to improve their qualifications and career prospects.

But the British Council has warned that the current economic downturn coincides with massive and rapid change in the global higher education market, partly fuelled by countries such as China and Singapore that have been traditional recruiting grounds developing their own university systems and beginning to retain and attract more international students.

Economic forecasting research in China, India and Nigeria commissioned by the British Council and conducted by the Economist Intelligence Unit shows that shifting demographics, domestic higher education provision, price sensitivity, exchange rate fluctuations and bilateral trade play a key role in students’ choice of study destinations.

While demand for postgraduate education is expected to continue to grow, recruiting students at this level can be less cost-effective since they may only stay in the UK for one or two years.

UK universities face a situation where, with rising costs outstripping growth in income from home students and other domestic sources of funding, they will depend more and more upon recruitment of international students to stay in the black and fund their development plans.

Some courses, particularly in certain “vulnerable” subject areas such as engineering and mathematics, would become unviable without a significant intake of students from overseas. Loss of key subject areas can begin to impact on reputation that in turn affects international recruitment, potentially leading to a downward spiral.

Recent figures from the United States also demonstrate how competition for international students is growing. They show that American universities are beginning to reap the benefits of more aggressive marketing and policy changes that have made the US a more attractive study destination for international students.

The British Council argues that in the new market conditions universities that fail to change their recruitment tactics and the way they operate overseas stand to suffer substantial losses, whereas those that adjust to the changing environment could emerge big winners.

Governments around the world are beginning to demand more from foreign universities that recruit students from their country as competition for a share of the market grows. American universities are already having some success in this new environment by creating academic alliances with overseas institutions. The British Council is providing support for UK universities that want to follow this path and develop long-lasting mutually beneficial partnerships abroad.

Pat Killingley, the British Council’s Higher Education Director, said: “With the economic downturn coinciding with unprecedented change in the multi-billion pound global education market, universities face a unique situation that presents new opportunities and threats. To survive and thrive in the new market conditions, it will not be good enough to just provide more of the same. Universities that want to emerge big winners rather than significant losers are going to have to change the way they operate overseas. The British Council is providing vital support by helping them track trends and respond appropriately in this uncertain environment.”

Martin Davidson, Chief Executive of the British Council, added: “The UK future economic competitiveness and prosperity will depend on our ability to work internationally and across different cultures. International education links provide vital opportunities for students and institutions to build our national capability to develop the skills and knowledge we will need. The best response to the current economic downturn is to invest in these links for the future.”

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The debate will take place at 12.15pm on Friday December 5 at the international exhibition and conference centre Excel London (http://www.excel-london.co.uk/)

The following participants are available for comment:

• Robin Bew, editorial director, The Economist Intelligence Unit
• Dr Linda Yeuh, fellow in economics, University of Oxford
• Peter Engardio, senior writer, International Business Week, USA

For a full Going Global conference programme, please visit: http://www.britishcouncil.org/goingglobal3

For more information, please contact:

James Rowe

Press Officer

The British Council

Tel: 020 7389 4939 / 07771 718135

Email: james.rowe@britishcouncil.org

Colin Beaver

Project manager EducationUK marketing and communications

The British Council

Tel: 0161 957 7028

Email: colin.beaver@britishcouncil.org

Tony Tysome

Director

Media FHE

Tel: 01629 650910

Email: tonytysome@yahoo.com

Notes to Editors

The British Council

The British Council is the UK’s international organisation for educational opportunities and cultural relations.

We work in 110 countries worldwide to build engagement and trust for the UK through the exchange of knowledge and ideas between people.

We work in the arts, education, science, sport and governance and last year we reached over 128 million people.

We are a non-political organisation which operates at arm’s length from government.