Divide-and-rule strategy for the overseas market

The UK needs a policy on foreign student recruitment that spreads the risk of downturns, says Mike Thorne

Most universities are interested in offering tuition to overseas students because they are committed to world development and believe their awards will give the students an advantage in life. They also know that it can bring in a healthy fee income.

Education has been key to the economic transformation of many economies. Recent statistics from the Organisation for Economic Cooperation and Development show that the higher students' qualifications, the higher their average earnings.

The net cash benefit to institutions is not always as clear as it seems, according to Australian research. Once costs are taken into account the benefit may be in cash flow rather than profit.

The past six or so years have seen an unprecedented change in what courses are on offer - in particular, the expansion of practical ones that countries are unable or unwilling to develop themselves. Many institutions now have significant numbers of students educated through distance-learning programmes. Research degrees are being supervised in different ways, and the quality of university education is high on the agenda of governments worldwide.

A commercial organisation would spend money on communicating the nature of these changes and their implications for the different market sectors. Yet there has been no United Kingdom strategy to do this.

In addressing the global market, the UK has neither articulated performance targets in terms of recruitment of overseas students in the way Australia has done, nor has it identified roles for the different kinds of institutions we have.

Much national thinking seems to recall the days when the UK believed no one could possibly want a motorbike with an engine of less than 250cc capacity - and then along came a host of Far Eastern manufacturers who cleaned up the mass market with 50cc machines.

Given that overseas students have different desired study patterns, price ranges and types of courses, why should a handful of the most expensive UK universities be best placed to meet the needs of the global higher education market? Yet that seems to be our default strategy.

It is not clear whether the diversity of our university sector is an embarrassment or a marketing tool. Should we be involved in healthy inter-university rivalry where the first objective is to secure the business for the UK regardless of league-table position? Are we confident that the prevailing view is not "it is better no one in the UK gets the business if my university does not".

We should not have to guess. To meet the needs of the market we will certainly want to work in partnership with target market governments, local and global companies, and with individual students themselves. This work needs to be underpinned by detailed, robust and independent market research, involving these stakeholders wherever possible, and this research must be made available to institutions.

The market intelligence available at present is acquired informally and unsystematically. Notwithstanding valiant steps taken by institutions individually, UK Higher Education plc has a dearth of the detailed market understanding necessary to formulate a strategy because the necessary investment has not been made.

With limited resources for communication and market development, market segmentation is a crucial tool.

We need to know how best to approach those segments and be clear about the roles and responsibilities of national organisations that affect the marketing of higher education. We need market research to be able to decide if the education arm of the British Council is underfunded and if its priorities match the best possible exploitation of the sector's diversity.

We need to consider carefully whether learning providers doubling as UK marketing organisations are going to realise maximum potential from the market.

Anecdotal evidence would suggest that we have seen a UK-wide downturn in overseas student recruitment this year, be it students coming here or being taught in their home countries. This is hardly a surprise given the currency crises.

What is a surprise, perhaps, is that we left ourselves so exposed to this risk. A more rigorous approach, based on detailed evidence, should enable the formulation of a strategy that not only targets an assured future global presence for UK higher education, but that spreads the risk better in future.

Mike Thorne is vice-principal of Napier University.