bis international education paper july 2013

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Industrial Strategy: government and industry in partnership

International Education:Global Growth and Prosperity

July 2013


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Contents | 1

Contents

Foreword 3

Executive Summary 5

1 Education Exports in 2013 12Global education 12

International students in the UK 14

Transnational Education 15

Publishing, educational suppliers and equipment 19

Research Collaboration 19

Value o education exports to the UK 21

2 Major Trends and Challenges 25UK Strengths 25

Lack o co-ordination between agencies and actors 27

Not structured or growth 27

Visas 28

Competition rom new types o provider 29

Stronger country-to-country competition 31

Changing customer relationships 33

3 The Policies 35A warm welcome or international students 35

Supporting Transnational Education 42

Leading the world in education technology 48

Building a new relationship with emerging powers 52

Building the UK brand and seizing opportunities 57


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2 | International Education Global Growth and Prosperity

Devolved administrations statement

Education is a devolved matter and this is a strategy or England. The strategy doesnot commit any o the devolved administrations o the United Kingdom to any UK-wide actions or policy positions. Where the stated actions have implications orUK-wide delivery bodies, this is without prejudice to the individual policies o theGovernments o the United Kingdom.

As we deliver this strategy, we will work closely with the devolved administrations onour areas o shared interest, particularly where this involves delivery bodies and otherorganisations with a remit that goes wider than just England.

Research policy is not a devolved matter and research councils oer UK wide

support.


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Foreword | 3

Foreword

There are ew sectors o the UK economy with the capacity to grow and generateexport earnings as impressive as education. As Minister or Universities and ScienceI have been ortunate enough to visit many dierent countries. Yet wherever I am inthe world the message about UK education seems to be the same. Our universities,colleges, awarding organisations and schools are recognised globally or theirexcellence. And we have many excellent education businesses such as Pearson, atruly great British brand and the worlds leading education company. However, thereis more that we can do to take advantage o this powerul reputation, and to seizethe opportunities that stem rom it. This strategy sets out an ambitious plan or us todo that.

Overseas students who come to Britain to study make a huge contribution to oureconomy. Each student in higher education on average pays ees o about 10,000 ayear and spends more than this again while they are here. In 2011/12 we estimatethat overseas students studying in higher education in the UK paid 10.2bn in tuitionees and living expenses. They boost the local economy where they study as well asenhancing our cultural lie, and broadening the educational experience o the UKstudents they study alongside. It is because we value this massive contribution thatthere is no cap on the number o legitimate students coming to Britain, nor do weplan to impose one.

Yet this is only one area in which we can grow. Education is in the early stages oglobalisation. I have visited middle income nations such as Indonesia, Turkey andBrazil, which are experiencing a surge in the number o young people. They want toeect a massive expansion o their education systems and they want to do so ast.This is a huge opportunity or us and one we must embrace.

Quite rightly our education system is envied on many levels, stretching beyond ouracademic excellence. Other countries are attracted to the expertise that UKinstitutions and organisations can oer on governance models, on proessionaldevelopment and curricular design, on construction, on the international reputation oour qualications and on management and nance. The attraction also extends to theinnovative equipment and technology solutions that our educational suppliers areconstantly developing. But the UK can also learn rom others. Countries like Indiaquite rightly want a reciprocal partnership with the UK based upon shared values andmutual respect.


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Bearing this in mind, or emerging markets we are adopting a new approach. Thenew Education UK Unit will identiy signicant opportunities requiring a co-ordinatedresponse which could include schools, colleges and universities as well as linkingup with broader services that support education initiatives such as nance or legalservices. They will then mobilise consortia to win the contracts. It is also aboutmaking the most o British ingenuity and innovation to develop new and aordablemodels or these countries to educate their growing numbers o young people.To do this we need to be at the oreront o the edtech revolution.

Because succeeding in emerging markets does not always equate to bricks and

mortar. The explosive growth in Massive Open Online Courses (MOOCs) and theirglobal reach has opened up a new door to education. We need to make sure it is adoor to our universities and colleges.

Education is changing ast, and we must be agile in our response. We start roma position o tremendous strength. This strategy sets out a determined plan toharness it.

David Willetts MP

Minister or Universitiesand Science


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Executive Summary | 5

Executive Summary

1. The education sector, including expenditure on national education systems, iscurrently the second largest sector globally ater healthcare.1 Enrolments inprimary and secondary education have risen rom 400 million and 184 million in1970 to 691 million and 544 million in 2010. Over the same period, the numbero students in tertiary education rose rom 33 million to 178 million.2 Growth isexpected to continue globally, as a result o demographic change and risingincomes in developing countries, with emerging economies particularly ocusedon increasing numbers o students in higher education.

2. International education, in all its orms, represents a huge opportunity orBritain. BIS estimates that in 2011 education exports were worth 17.5bn to

the UK economy. This strategy analyses the economic opportunities resultingrom this growth, and sets out a targeted plan or the UK to grasp them,building on our education strengths both at home and abroad.

3. Britain is already in a powerul position. Global names such as the BBC, theScience Museum and the Premier League put us rmly on the map. Ourschools, colleges and universities have a long history o excellence andinnovation, and a global reputation or quality and rigour. Our reorms at alllevels o education have excited interest rom across the world, with the OECD(Organisation or Economic Co-operation and Development) concluding

recently that Britain is the rst country in Europe to have achieved a sustainablesystem or nancing higher education. At present 75% o our educationalexport income comes rom international students studying in the UK. Whilethere are now a growing number o courses taught in English around the world,many students still value being taught by native speakers. And they certainlyvalue the British educational experience and the UK educational brand.However, this is not the only area with potential or growth. As we shall explore,we can oer more UK education overseas, exploiting innovations in educationaltechnology and orming multi-aceted relationships with emerging powers allover the world.

1 GCC Education Industry Report, 2010. Produced by Alpen Capital. http://www.alpencapital.com/includes/GCC-Education-Industry-Report-September-2010.pd

2 World Bank databank.
http://www.alpencapital.com/includes/GCC-Education-Industry-Report-September-2010.pdfhttp://www.alpencapital.com/includes/GCC-Education-Industry-Report-September-2010.pdfhttp://www.alpencapital.com/includes/GCC-Education-Industry-Report-September-2010.pdfhttp://www.alpencapital.com/includes/GCC-Education-Industry-Report-September-2010.pdf


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A warm welcome or international students4. Overseas students who come to Britain to study make a huge contribution

to our economy. In 2011/12 we estimate that overseas students studying athigher education institutions in the UK paid 3.9bn in tuition ees (net oscholarships) and 6.3bn in living expenses.3 This market has grown sharply inrecent years, but competition rom other countries is intensiying. We believe itis realistic or numbers o international students in higher education to grow by15-20% over the next ve years. For this to happen we must show that the UKvalues international students, will provide a warm welcome and support while

they are here and will keep in touch ater they go home.5. We have reormed the student visa system to ensure that students who are not

genuine cannot abuse the system. There remain some misunderstandingsabout visa rules and post study opportunities to work. We must signal clearlythat there is no cap on the number o students who can come to study in theUK and no intention to introduce one. Nor is there any cap on the number oormer students who can stay on to work as long as they have a graduate job.Additionally, all PhD graduates have an automatic right to stay or up to a yearto work ater completing their doctorate and there is a new scheme or up to1,000 MBA students to stay here or a year on a Tier 1 visa.

We will work with the British Council, UK Trade and Investment (UKTI) andothers to communicate the UK education oer in key target markets includingChina, India, USA, Brazil, Mexico, Indonesia, Turkey, South Korea, Russia andemerging nations within Europe.

We will increase protection or international students while they are here. Incrisis cases, such as the confict in Syria, students experience problems likeaccessing money and renewing visas. The Department or Business,Innovation and Skills (BIS) has set up a new cross-Government Responding toInternational Students Crises (RISC) committee to monitor emerging crisesand identiy where action is needed.

We will explore opportunities to broker new partnerships with countries lookingto send large numbers o students to the UK on government scholarships.This builds on successul recent programmes like Science without Borders(Brazil 10,000 students over our years) and Dikte (Indonesia 150Indonesian PhD students each year).

The Foreign Oce will work closely with its global network o overseas poststo encourage greater engagement with the alumni o the Cheveningscholarship programme. An interdepartmental project is planned to build and

maintain engagement with the 200,000 oreign students who graduate romUK universities every year.

BIS calculations based on HESA nance data and the Student Income and Expenditure Survey (SIES) 2011/12.3


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Supporting transnational education6. Many overseas students want to access good quality UK qualications in their

own countries, and technological advances make such transnational education(TNE) a realistic aspiration.

7. TNE, the provision o education or students based in a country other thanthe one in which the awarding institution is located, opens up much wideropportunities and can encourage international students to pursue urtherstudies in the UK. Figures rom the Council o British International Schools(COBIS) indicate that 39% o pupils that let British Schools Overseas (BSO) in2012 went on to study at a UK higher education institution. TNE also improvesthe prole o UK education overseas and helps to demonstrate that the UK isoutward looking and willing to adapt to dierent countries requirements. Wewant to support universities, colleges, English language teaching providers,independent schools and private education companies to deliver a UKeducation overseas.

To support this aim we will reinorce the quality assurance ramework or TNE: For English language providers: English UK is planning to pilot an

international accreditation scheme or English language teaching organisationsin two countries, one in Europe and one in Central America. This will bedelivered by assessing all participating organisations against a set ooverarching standards and associated inspection criteria. The proposedscheme will export UK standards as the global benchmark o quality, enhancethe UKs reputation as a global leader and signal to potential students thepre-eminence o the UK in English language teaching and learning.

For schools:The Department or Education has introduced a voluntaryscheme or quality assurance o BSOs. Schools can choose to beinspected against standards similar to those or independent schools inEngland, by inspection bodies whose work is quality assured by Osted.BSOs are then awarded a Department or Education number and theirnames are published on the Governments website. This is an increasinglypopular kitemark o quality in this market. They can also participate in theinduction programme or newly qualied teachers.

For colleges:The urther education sector has an established qualityassurance system or teaching and learning content, and we are askingthem to develop this or provision delivered abroad, working with keypartners including Osted, the Quality Assurance Agency (QAA) and the

British Council. The urther education sector is also considering how it candevelop an appropriate quality assurance system or delivery oqualications overseas.


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For universities: QAA and the Higher Education International Unit willconsult the sector in the autumn o 2013 on how to strengthen the qualityassurance o higher education delivered overseas. The consultation willpropose a signicantly strengthened risk-based element to ocus resourceand attention where they are most needed. It will also propose robustmodels and mechanisms to demonstrate the commitment o individual UKTNE providers to high quality provision and the protection o the UK sectorsstrong reputation.

We are in discussions with key partner countries, including the United Arab Emirates, India and Russia, to achieve mutual recognition o qualications.

Leading the world in education technology

8. Ecient exploitation o technology will remain a key eature and enabler ogrowth in education. UK companies are among the most innovative in thedevelopment o digital learning resources in schools and colleges, and we mustmaintain an environment that supports such innovation. The UK already hoststhe annual British Educational Training and Technology (BETT) exhibition, by ar

the largest and best attended educational technology event in the world, witha reputation or showcasing cutting edge technology drawing on a largeinternational audience this year over 12,000 people. The Governmentrecognises education technology rms can ace challenges accessing nanceas well as other support and is committed to making it easier or small andmedium sized business to access the right support. We will promote to theeducation technology community the ull range o generic enterprise supportthat they can access. UK Export Finance, the UKs government-backed exportcredit agency, can also oer help to exporters and investors, typically in theorm o insurance and guarantees.

9. The recent development o Massive Open Online Courses (MOOCs) in highereducation has raised the prospect that new technology could undamentallychange how education is delivered. At present the main players are based inthe USA, but their potential reach is truly global. Education is becoming agenuinely multi-national sector, attracting more and more investors interested inlarge scale global expansion. In response, established UK providers need to befexible, entrepreneurial and willing to orm partnerships, which may cross oldpublic-private boundaries.


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We will encourage and promote UK institutions developing new modes otechnology-supported delivery in global markets. The Open University, togetherwith 21 other leading UK universities, the British Library, British Museum andBritish Council will pioneer FutureLearn the rst UK MOOC platorm.

A global market needs an international dimension. FutureLearn has already partnered with Trinity (Dublin) and Monash (Australia) while Edinburgh runs MOOCs on the US Coursera platorm.

We will work with the Technology Strategy Board (TSB) and other partners todevelop a more targeted support programme or educational technologyinnovation and its commercialisation. This will include a call or innovators tocome orward with their designs to exploit modern educational technology anda new Small Business Research Initiative competition.

An advisory group with technology experts rom the sector and industry will provide guidance to the Skills Minister on how technology can be used to improve and enhance learning across the skills sector.

Building a new relationship with emerging powers

10. New relationships will increasingly emerge between countries with a demandor education and countries looking to supply it. The suppliers will need toocus on what these markets want and where they want it. That is likely tomean education and skills training delivered in their own country, supplementedby partnerships that support research and innovation. While emergingeconomies will continue to send students overseas, they also wanttransormational change in their domestic education systems. India and China,as well as having the largest education systems, are expected to send themost students abroad.

11. We will demonstrate that the UK wants a relationship based on mutualrespect that is thoroughly attuned to their developing aspirations and needs.Core to sustaining such relationships is a two-way exchange o ideas andpeople. We will expand the number o Chevening scholarships available orinternational students to study in the UK. It is also a key ambition to increasethe number o UK students gaining valuable experience through overseasmobility placements, which both increases students employability andsupports the UKs ties overseas.

12. Individual institutions and companies engage in their own education export

activity all over the world and this will continue. But in certain countries, there isalso a real opportunity or the UK to bring together the strength and depth othe whole education sector as well as other sectors that support educationexports like nance, construction and law making a comprehensive UK oer.


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We have identied eight priority countries and one region or international education. These are China, India, Brazil, Saudi Arabia, Colombia, Turkey, Mexico, Indonesia and the Gul.

We have enhanced bilateral knowledge and innovation partnerships with emerging powers including the UK-India Education and Research Initiative (UKIERI) and UK-China Partners in Education Programme (UKCPIE).

We will expand the number o Chevening scholarships available or international students to study in the UK.

The Department or International Development (DFID) plans to double itsinvestment in development partnerships in higher education. This will increaseopportunities to draw on international expertise and the signicant strengths othe UK higher education sector to benet DFID ocus countries.

The higher education sector, through the Higher Education International Unitsupported by Government unding, is developing an outward mobility strategyto encourage UK students to study abroad. This will include building anawareness o the benets o time spent abroad and working with business tound scholarships, broker internships, and reinorce messages on the value omobility or employability. The British Council is contributing to this strategy byproviding an online portal with inormation on study opportunities and deliveryprogrammes such as Generation UK which promotes study and internshipopportunities in China.

The Government and the devolved administrations will decide what local measures are necessary to support their outward mobility priorities. For example in 2013/14, England is introducing new measures to promote to students taking study placements outside the EUs Erasmus scheme, recognising the equal importance o students gaining experience in other countries.

Building the UK brand and seizing opportunities

13. The UK has strengths across the whole breadth o the education sector whichmeans we can respond to the most complex and highest value opportunities.But to do this, the whole sector must work together.


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We will appoint a UK Education Champion who will co-chair the InternationalEducation Council.

The new Education UK Unit will support the UK education sector in the exportmarket ocusing on high value opportunities overseas. It will ensure that large-scale complex commercial education and training opportunities, to which theUK is not currently well-equipped to respond, are eectively pursued. By 2015,the Unit aims to secure contracts worth 1 billion, with a longer-term goal osecuring 3 billion by 2020.

The GREAT Britain campaign was developed last year or the Government tocollaborate with British brands in marketing the UK. Education is GREATBritain will become part o this campaign and the British Council and UKTI arerunning campaigns promoting education in China, India, USA, Brazil, Mexico,Indonesia, Turkey, South Korea, Russia and emerging nations within Europe.

We will also expand the Education UK recruitment service, which has beenused by the British Council to attract international students to the UK. Anenhanced website will represent boarding schools, English language schools,colleges and universities as well as the UK transnational education market. Itwill be easier or students to search or courses, institutions and scholarships

and to nd reputable agents in their own country.

International Education Council

14. The Government will establish a new International Education Council to act asa champion or this strategy and the international education sector. It willensure eective communication and engagement with all parts o the sector.


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1 Education Exports in 2013

The education sector1.1 The education sector is the second largest sector globally ater healthcare.

Estimates o value vary depending on what is included but one estimate ortotal global education expenditure in 2012 was US$4.5tr.4 It is likely to continueto grow. This is partly due to demographic change with the total globalpopulation orecast to increase rom nearly 6.9 billion in 2010 to over 7.6 billionin 2020. It is also signicant that many emerging economies see education asa priority and are spending comparatively high proportions o householdincome on education 13% in China, 11% in India and 10% in Brazil.5

Figure 1.1: Global enrolment by level o education, 1970-2010

0

100

200

300

400

500

600

700

800

Worldenviro

nmentrates(millions)

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Primary Secondary Tertiary

Source: World Bank Education statistics

4 Education Sector Factbook 2012. GSV EDU.http://gsvadvisors.com/wordpress/wpcontent/uploads/2012/04/GSVEDUFactbookApr132012.pd

5 Bureau o Labour Statistics, Oce o National Statistics and Credit Suisse quote in Pearson 2012 resultspresentation.http://www.slideshare.net/hemartin/pearson2012resultsppresentation25022013web
http://gsvadvisors.com/wordpress/wp-content/uploads/2012/04/GSV-EDU-Factbook-Apr-13-2012.pdfhttp://gsvadvisors.com/wordpress/wp-content/uploads/2012/04/GSV-EDU-Factbook-Apr-13-2012.pdfhttp://www.slideshare.net/hemartin/pearson-2012-results-ppresentation25022013-webhttp://www.slideshare.net/hemartin/pearson-2012-results-ppresentation25022013-webhttp://gsvadvisors.com/wordpress/wp-content/uploads/2012/04/GSV-EDU-Factbook-Apr-13-2012.pdfhttp://gsvadvisors.com/wordpress/wp-content/uploads/2012/04/GSV-EDU-Factbook-Apr-13-2012.pdf


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Education Exports in 2013 | 13

1.2 This suggests that the export opportunities or the UK will grow rapidly overthe coming decades. This chapter looks at how this growth will be distributedacross dierent parts o the sector. It nds that strong growth will continueacross the whole o the education sector and that, in particular, internationalstudents coming to study in the UK will continue to be important to UKeducation exports. The edtech and English language teaching sub-sectors alsopresent very good opportunities or growth. More detailed analysis o the UKcurrent perormance in education exports can be ound in the analyticalnarrative accompanying this strategy.

1.3 For the purpose o this strategy, we are including in the education sector: International students studying at English language schools in the UK International students at independent schools and urther education colleges

in the UK

International students at universities and other higher education providers inthe UK

Students studying English in their home country with UK English languagetrainers

Students at English-medium schools overseas that ollow British curricula

Students studying or qualications awarded by UK awarding organisations Students studying or urther education and vocational qualications

overseas

Students studying or a UK higher education or vocational qualicationoverseas

Research collaboration Educational publishing, equipment and supplies

English language teaching inthe UK

1.4 In 2011 there were over 1.5 millionstudents worldwide who studied Englishoutside o their home country.6 Over thepast ve years, the number o studentshas remained at roughly this level withsome slight fuctuation. This market was

worth US$11.6bn in 2011.

All gures rom Study Travel Magazine.http://www.hothousemedia.com/ltm/ltmbackissues/dec12web/dec12specreport.html

6
http://www.hothousemedia.com/ltm/ltmbackissues/dec12web/dec12specreport.htmlhttp://www.hothousemedia.com/ltm/ltmbackissues/dec12web/dec12specreport.htmlhttp://www.hothousemedia.com/ltm/ltmbackissues/dec12web/dec12specreport.htmlhttp://www.hothousemedia.com/ltm/ltmbackissues/dec12web/dec12specreport.html


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1.5 The UK was the most popular destination or students studying English outsideo their home country. In 2011, we attracted nearly 50% o students globallyworth 2.5 billion including both tuition and living costs7. This represents 35%o the global market by value.8 With the UKs position as the home o Englishand many people preerring to learn English rom native speakers, the UK ELTsector is well positioned to take advantage o the opportunities arising romgrowth in this global market.

International students at schools in the UK

1.6 In 2012/13 there were nearly 26,000 international students studying at over1,200 independent schools in the UK on a ee-paying basis. Fee income orinternational pupils at independent schools was estimated to be 685m in2012/13, up rom 430m in 2007/08.9 The Independent Schools Councilbelieves that international student numbers in independent schools couldincrease at 3% per annum in the near uture.

International students at urther education colleges in the UK

1.7 In 2012, 31,500 visas were approved or students studying in urther

education.10

This only captures students rom outside the European EconomicArea who are studying or more than one year, so it is likely to be anunderestimate. Recent research shows that in 2011/12 there were also over3,000 EU students and 7,600 non-EU students studying at urther educationlevel in alternative (privately-unded) higher education providers.11

1.8 International students in urther education are estimated to have paid 350m intuition ees in 2011/12 and 980m in living expenses.12 These gures arebased on the number o students outlined above, and are likely to be anunderestimate.

International students in higher education in the UK

1.9 In 2011/12, there were 435,000 international students studying at 163 publicly-unded higher education institutions. There were also 53,000 international

7 The gure or the ELT sector in table 1.1 is lower (2bn) as this only covers private ELT providers to avoiddouble-counting o public-unded providers, such as HE institutions.

8 Study Travel Magazine, December 2012 edition.9 Based on data rom the Independent Schools Council Annual Census 2008 and 2013 and ollowing the same

methodology as the London Economics report.10 http://www.homeofce.gov.uk/publications/scienceresearchstatistics/researchstatistics/immigrationasylum-

research/immigrationtabsq42012/?view=Standard&pubID=115626311 Privately unded providers o Higher Education in the UK

https://www.gov.uk/government/publications/privatelyundedprovidersohighereducationintheuk12 BIS calculations based on tuition ees outlined in the BIS research project, Evaluation o the Value o Tier 4

International Students to FE colleges and the UK Economy and SIES 2011/12.
http:///reader/full/education.10http:///reader/full/education.10http:///reader/full/providers.11http:///reader/full/providers.11http:///reader/full/expenses.12http:///reader/full/expenses.12http://www.homeoffice.gov.uk/publications/science-research-statistics/research-statistics/immigration-asylum-research/immigration-tabs-q4-2012/?view=Standard&pubID=1156263http://www.homeoffice.gov.uk/publications/science-research-statistics/research-statistics/immigration-asylum-research/immigration-tabs-q4-2012/?view=Standard&pubID=1156263https://www.gov.uk/government/publications/privately-funded-providers-of-higher-education-in-the-ukhttp:///reader/full/education.10http:///reader/full/providers.11http:///reader/full/expenses.12https://www.gov.uk/government/publications/privately-funded-providers-of-higher-education-in-the-ukhttp://www.homeoffice.gov.uk/publications/science-research-statistics/research-statistics/immigration-asylum-research/immigration-tabs-q4-2012/?view=Standard&pubID=1156263http://www.homeoffice.gov.uk/publications/science-research-statistics/research-statistics/immigration-asylum-research/immigration-tabs-q4-2012/?view=Standard&pubID=1156263


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students studying at 159 alternative providers, 70% o whom were studyingat undergraduate level.13 The UK is the second most popular destination orinternationally mobile higher education students (behind the USA). In 2011 theUKs global market share was 13%, up rom 12.8% in 2006.14

1.10 In 2011/12, internationally mobile students studying at higher educationinstitutions in the UK paid 3.9bn in tuition ees (net o scholarships) and6.3bn in living expenses.15 Other higher education-related export activity, suchas research, academic and administration services and the sale o intellectualproperty, is estimated to have been worth a urther 1.1bn.

1.11 Global demographic change and rising incomes in developing countries is likelyto increase the number o internationally mobile students. The British Councilestimates that the total number o students enrolling in higher educationworldwide, including those studying in their home country, will increase by 21million between 2011 and 2020 rom 178 million to 199 million, with continuedgrowth in emerging markets.16 O these, about 450,000 are expected to beinternationally mobile, with 130,000 going to the major destination countries(US, UK, Australia, Canada, Germany, France and Japan).17

TNE English language training (ELT)1.12 The market or students studying English in their home country was estimated to

be worth over US$50 billion in 2012.18 The British Council estimates that theglobal market or English language learners is 1.5 billion learners, with around 1.5million studying outside their home country. O those who study English outsidethe national education system, only 15% are estimated to access ormal ace-toace or blended learning ELT. The other 85% are estimated to be sel-accesslearners; they use media such as the internet, newspapers and TV.

1.13 Direct income to the UK rom the provision o ELT abroad mainly comes rom

entry ees or UK awarding organisations exams and some repatriation oprots rom UK providers operating overseas. The purchase o textbooks orother equipment and bespoke training also brings benet to the UK. There arealso enormous indirect benets to the UK rom more people learning to speakEnglish and coming into contact with British culture.19

13 Privately unded providers o Higher Education in the UK, BIS, 2013.14 Measured by nationality. Source: OECD Education at a Glance 2012, table C4.7.15 BIS calculations based on HESA nance data and the Student Income and Expenditure Survey (SIES) 2011/12

and international student numbers at both publicly-unded HEIs and alternative providers.16 Based on World Bank data or tertiary enrolments in 2011.17 The shape o things to come: higher education global trends and emerging opportunities to 2020 British

Council, 2012.18 Total ELT market o US$63.3bn (Source: Education Sector Factbook 2012, GSV EDU) minus size o ELT market

or students studying outside their home country US$11.6bn in 2011 (Source: Study Travel Magazine).19 Culture Means Business, British Council, 2013.

http://www.britishcouncil.org/sites/deault/fles/documents/culturemeansbusinessreport.pd
http:///reader/full/level.13http:///reader/full/level.13http:///reader/full/expenses.15http:///reader/full/expenses.15http:///reader/full/markets.16http:///reader/full/markets.16http:///reader/full/Japan).17http:///reader/full/Japan).17http:///reader/full/culture.19http:///reader/full/culture.19http://www.britishcouncil.org/sites/default/files/documents/culture-means-business-report.pdfhttp:///reader/full/level.13http:///reader/full/expenses.15http:///reader/full/markets.16http:///reader/full/Japan).17http:///reader/full/culture.19http://www.britishcouncil.org/sites/default/files/documents/culture-means-business-report.pdf


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1.14 The global ELT sector (both studying in-country and abroad) is orecast to growby an average o 25% per year over the period 2012-17; rising rom US$63bnto US$193bn.20 However, much o this is likely to be in relatively low-levelprovision. Opportunities or the UK will most likely come rom demand or highquality and niche provision, in which the UK has a comparative advantage.Thereore, it is likely that UK rms will only target the high value proportion othis growth.

TNE schools

1.15 In the schools sector, there were 3.1 million pupils studying at over 6,300English-medium schools worldwide in 2012.21 O these, 1.4 million pupils werestudying at nearly 3,000 British Schools Overseas (BSOs), where at least 50%o the curriculum is British. This gure includes approximately 19,000 pupilsstudying at 29 overseas campuses o UK independent schools.22 Fee revenuein 2012 at English-medium schools worldwide was 20bn with an estimated9.6bn coming rom British Schools Overseas,23 although the majority o thiswill remain in the country o delivery, or example or the upkeep o estates andsta salaries.

1.16 The number o students at English-medium schools worldwide is orecast toincrease to over 4.4 million in 2017 and nearly 6.2 million in 2022. O these,student numbers at BSOs is orecast to grow to nearly 2 million in 2017 and2.75 million in 2022, with ee income orecast to rise to 12.9bn and 17.2bnin 2017 and 2022, respectively.24

TNE urther education and qualifcations

1.17 The main orm o TNE in the urther education sector is the administrationo UK awarding organisations qualications to individuals abroad. Theseawarding organisations also oer qualications to other sub sectors such asschools and English language teaching. British international qualications suchas the IGCSE and Cambridge International A Level are the national secondaryqualications in some countries. Inormation provided by awardingorganisations suggests that the total income rom overseas activities wasaround 210m in 2011.

1.18 The large awarding organisations o City & Guilds, Cambridge InternationalExaminations and Cambridge English all report positive year on year growth in

20 Education Sector Factbook 2012, GSV EDU.http://gsvadvisors.com/wordpress/wpcontent/uploads/2012/04/GSVEDUFactbookApr132012.pd

21 ISC Research Ltd.22 Latest data rom Independent Schools Council23 ISC Research Ltd.24 ISC Research Ltd.
http:///reader/full/US$193bn.20http:///reader/full/US$193bn.20http:///reader/full/schools.22http:///reader/full/schools.22http:///reader/full/respectively.24http:///reader/full/respectively.24http://gsvadvisors.com/wordpress/wp-content/uploads/2012/04/GSV-EDU-Factbook-Apr-13-2012.pdfhttp://gsvadvisors.com/wordpress/wp-content/uploads/2012/04/GSV-EDU-Factbook-Apr-13-2012.pdfhttp:///reader/full/US$193bn.20http:///reader/full/schools.22http:///reader/full/respectively.24http://gsvadvisors.com/wordpress/wp-content/uploads/2012/04/GSV-EDU-Factbook-Apr-13-2012.pdfhttp://gsvadvisors.com/wordpress/wp-content/uploads/2012/04/GSV-EDU-Factbook-Apr-13-2012.pdf


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their international markets. In the case o City & Guilds, they have experiencedat least 20 percent year on year growth and predict this trend to continue.Cambridge English Language Assessment (ormerly Cambridge ESOL) hasreported signicant increases in the number o international students takingtheir English Language certicates; they now cover 130 countries and 3.5million people. English language training is a particularly important, andgrowing, market as it is oten essential or overseas students to progress intotertiary education and employment in the UK. While it has been harder toquantiy, there is a signicant export market or other smaller awardingorganisations and proessional bodies, which also report opportunities or

growth. The biggest potential or economic growth rom qualications exportslies in existing organisations urther expanding their business.

TNE higher education

1.19 In 2011/12, there were 570,000 higher education students (474,000 atundergraduate level and 96,000 at postgraduate)25 studying or a UK highereducation qualication at institutions abroad or via distance learning, with 124UK institutions oering accreditation or these courses. In 2011/12, there werealso nearly 8,000 international students studying at alternative providers via

distance learning.26

1.20 The Government does not collect data on UK higher education institutionsearnings rom TNE. There are many dierent models o TNE and each will havedierent potential or income generation per student, running costs, exportpotential (repatriation o gross income to the UK) and risk (such as the level oquality oversight). All these actors will be aected by local country conditions,the reputation o UK institutions and overseas providers, and the level ocompetition.

1.21 It is likely that TNE programmes will continue to be developed in established

host country markets such as Malaysia and Singapore. Recent surveyevidence suggest that a majority o global institutions have plans to expandtheir oering o joint and/or double degree courses.27Forthcoming BritishCouncil research nds that the TNE landscape varies rom country to countryand that it is generally linked to the host countrys rationale or TNE with HongKong, Malaysia, Singapore and the United Arab Emirates currently oering themost avourable environments.

25 HESA Student Record.26 Privately unded providers o Higher Education in the UK, BIS, 2013.27 Institute o International Education (2011),Joint and Double Degree Programs in the Global Context.http://

www.iie.org/ResearchandPublications/PublicationsandReports/IIEBookstore/JointDegreeSurvey-

Report2011
http:///reader/full/learning.26http:///reader/full/learning.26http://www.iie.org/Research-and-Publications/Publications-and-Reports/IIE-Bookstore/Joint-Degree-Survey-Report-2011http://www.iie.org/Research-and-Publications/Publications-and-Reports/IIE-Bookstore/Joint-Degree-Survey-Report-2011http://www.iie.org/Research-and-Publications/Publications-and-Reports/IIE-Bookstore/Joint-Degree-Survey-Report-2011http:///reader/full/learning.26http://www.iie.org/Research-and-Publications/Publications-and-Reports/IIE-Bookstore/Joint-Degree-Survey-Report-2011http://www.iie.org/Research-and-Publications/Publications-and-Reports/IIE-Bookstore/Joint-Degree-Survey-Report-2011http://www.iie.org/Research-and-Publications/Publications-and-Reports/IIE-Bookstore/Joint-Degree-Survey-Report-2011


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UK Higher Education Campus Presence Overseas

LancasterUniversity

Accra, Ghana

University

College LondonAdelaide, Australia

University of NottinghamNingbo, ChinaUniversity of SurreyDalian, ChinaManchester BusinessSchoolShanghai, China

Heriot-Watt University Dubai, UAEManchester Business School Dubai,UAEMiddlesex University Dubai, UAEUniversity of Bradford Dubai, UAEUniversity of Exeter Dubai, UAELondon Business School Dubai, UAECASS Business School Dubai, UAEUniversity of Bolton, Ras Al Khaimah,UAE

WestminsterInternationalUniversity

Tashkent, Uzbekistan

Manchester BusinessSchoolSingapore

Queen MargaretUniversity EdinburghSingapore

Manchester BusinessSchoolHong Kong

Newcastle UniversityMalaysiaUniversity of NottinghamMalaysiaLancaster University Partner with SunwayUniversityKuala Lumpur, Malaysia

Source: Global Higher Education, 201328

N.B There is no single denition o what constitutes a UK campus overseas. This means the number o UK campuses indicatedby reporting organisations such as HESA (Higher Education Statistics Agency), OBHE (Observatory on Borderless HigherEducation) and Global Higher Education (diagram above) will vary.

Overseas universities setting up in the UK

1.22 The UK is also an important market or overseas higher education providers

and many have a presence in the UK, including Syracuse University andRichmond, the American International University in London. BIS issues clearguidance, on request, on what is required to establish an overseas campushere. It also provides advice or overseas institutions who want to oer UKdegrees in addition to their own degrees, as well as options or establishinglinks with existing UK higher education providers.

28 Global Higher Education, 2013http://www.globalhighered.org/branchcampuses.php
http://www.globalhighered.org/branchcampuses.phphttp://www.globalhighered.org/branchcampuses.php


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Publishing, educational supplies and equipment1.23 In 2011, total education-related publishing export income, both physical and

digital was worth 858 million. In addition, the Publishers Association estimatethat 80-90% o learned journal turnover arises rom exports, with total turnover(domestic and export) estimated to be between 1bn and 1.5 billion.According to the British Educational Suppliers Association (BESA), in 2011there were 476 rms in this sector, 291 o which exported directly; other rmssell via distributors which may then export themselves. In 2011, exports wereestimated to have been worth 507 million. This was expected to rise to 539

million in 2012 and 580 million in 2013.29

1.24 BESA has identied the ollowing areas, in particular, as target regions or utureexports: the Gul, North-East and South-East Asia and the EU. The range oproducts that are exported is extensive or all levels o education: not onlyleading-edge technology, but also more traditional teaching aids, an area inwhich there is still substantial innovation by UK manuacturers, as well asadvanced ergonomic urniture design.

Research Collaboration

1.25 Research is inherently a global activity with the best researchers aliated toorganisations all over the world and the most highly cited papers producedthrough international collaboration. International collaboration is important tomaintain the excellence o the UK research base, provide early access tomarkets and promote inward investment. The UK has a high percentage oco-authored papers compared to many others.

29 BESA research report: Education Export Market Perormance Outlook, January 2012


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Figure 1.2: Research Collaboration, 2000-2011

50%

40%

30%

20%

10%

0%2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

United Kingdom Canada Finland France

Germany Italy Japan South Korea

United States China

Source: International Comparative Perormance o UK Research Base30

1.26 Spending on research and development in many emerging economies hasbeen increasing rapidly in recent years. The quality o science and research inthese countries is improving and there are already clear benets or the UKrom collaboration.

30 International Comparative Perormance o UK Research Base, 2011 reporthttps://www.gov.uk/government/publications/ukresearchbaseinternationalcomparativeperormance2011
https://www.gov.uk/government/publications/uk-research-base-international-comparative-performance-2011https://www.gov.uk/government/publications/uk-research-base-international-comparative-performance-2011


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University o Nottingham Ningbo

The University o Nottingham Ningbo China(UNNC) was the rst Sino-oreign universityto be established in China. This awardwinning campus oering a UK-styleeducation has grown to a student body omore than 5,000 in just 8 years. It generateshigh-impact, internationally relevant research

and has obtained research grants rom Chinain a number o signicant areas at theMunicipal, Provincial and National level as well as winning an important EU grant.

An exciting development or the University involves the International DoctoralInnovation Centre (Energy and Digital Economy). It will train up to 100 o thebrightest researchers to become uture leaders and to transorm and implementtechnologies, which address global challenges and enhance the cooperation oresearch and innovation between China and the UK.

In August 2009, the Graduate School was added to the University. This provides

Masters and PhD opportunities. The Graduate School promotes research andtraining on a campus-wide scale while creating links with the UK campus,Malaysia campus and the external business and training community in China.

Value o education exports to the UK

1.27 A previous BIS-commissioned research project31 estimated that UK educationexports were worth 14.1bn in 2008/09.32 Internal BIS analysis using a similarmethodology and the most recent data, gives an updated gure to be worth17.5bn in 2011 (see table 1.3).

31 Estimating the Value to the UK o Education Exports, BIS Research Paper Number 46, June 2011. Undertakenby London Economics or BIS.http://www.bis.gov.uk/assets/biscore/highereducation/docs/e/11980estimatingvalueoeducationexports.pd

32 Education exports are dened as those activities where money comes to the UK rom an overseas source,either or an education-related activity taking place in the UK (e.g. international students studying at a UK HEI)or rom an education-related activity occurring overseas (e.g. TNE).
http:///reader/full/2008/09.32http:///reader/full/2008/09.32http://www.bis.gov.uk/assets/biscore/higher-education/docs/e/11-980-estimating-value-of-education-exports.pdfhttp://www.bis.gov.uk/assets/biscore/higher-education/docs/e/11-980-estimating-value-of-education-exports.pdfhttp:///reader/full/2008/09.32http://www.bis.gov.uk/assets/biscore/higher-education/docs/e/11-980-estimating-value-of-education-exports.pdfhttp://www.bis.gov.uk/assets/biscore/higher-education/docs/e/11-980-estimating-value-of-education-exports.pdf


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Table 1.3: Estimated value o education exports to the UK in 2011

m (2011 prices, to nearest 10m)

Higher Education (including EU students)

Tuition ees (net o scholarships) 3,660

Living expenditure 5,540

Other 1,000

(Cost to Govt o tuition ee loans to EU undergraduates RAB charge) (70)

English Language Training

Tuition and living expenses 2,000

Schools

Tuition and living expenses 620

Education Products and Services 1,590

Further Education

Tuition ees 320

Living expenditure 810Other 40

Transnational education income indicative fgures only

Higher Education * 300

English Language Training ** 90

Schools *** 960

Further Education **** 30

TOTAL 17,490Source: Internal BIS estimates based on methodology rom London Economics report* Based on value rom London Economics report and assuming average value per student is maintained in real terms** Assuming 10% o income or UK ELT providers abroad is repatriated*** Assuming 10% o income or British Schools Overseas is repatriated**** Based on value rom London Economics report

1.28 Over 75% o estimated income in 2011 (13.6bn) is derived rom the tuition

ees and living expenses o students physically studying in the UK. TNE addsless direct economic value to the UK as the majority o expenditure occursabroad, with only a proportion being repatriated to the UK.


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1.29 Education exports also bring a number o indirect benets, includingstrengthening the quality and reputation o the UK education sector andpromoting the English language and British culture.

1.30 ELT and school-level education help to provide a pipeline o prospectivestudents who will study in the UK. A survey by the Independent SchoolsCouncil (ISC) ound that 77% o international pupils at ISC schools go on touniversities in the UK. This equates to 8,000 entrants per annum rom ISCschools. Figures rom the Council o British International Schools (COBIS)indicate that 39% o pupils (equivalent to approximately 42,000 people) that let

BSOs in 2012 went on to study at a UK higher education institution. ELT canalso increase the potential pool o international students as it helps moreindividuals gain the required level o English or education courses in the UK.

1.31 Fee income rom non-EU students is a signicant proportion o total income ora large number o higher education institutions. In 2011/12, ee income romnon-EU students accounted or more than 20% o total income at 13 highereducation institutions and between 10% and 20% or a urther 68 highereducation institutions together this means that hal o all publicly-undedhigher education institutions in the UK earn more than 10% o their incomerom non-EU students. International students also stimulate demand or

courses where domestic demand alone can be insucient to sustain them,thus ensuring that a wider range o courses are available or all students andsome strategically important courses remain viable. For example, or taughtpostgraduate courses in 2011/12 non-UK students made up 84% o newentrants in electronic and electrical engineering, 76% in production andmanuacturing engineering and 67% in computer science.33

1.32 International students in the UK bring diversity to the education sector, helpingto provide an international dimension that benets all students. Engagement ininternational education, both in the UK and via TNE, enhances the reputation

and brand recognition o UK institutions and helps project the UKs sot power.The experience o students in UK education helps to create good relations thatwill enable successul engagement with the next generation o global leaders.TNE also plays a role in promoting the UK as a destination or study.

1.33 Certain models o TNE, such as overseas campuses, can allow UK highereducation institutions to bid or and engage in overseas-unded researchprojects. For example the University o Nottinghams presence in China enablesthem to bid or Chinese Government research unding. More broadly, TNEenables UK institutions to develop partnerships with overseas counterparts andbusinesses, which can lead to joint research and collaboration in other areas. Itcan also help to attract students to the institutions campus in UK or urther

33 HESA Student Record
http:///reader/full/science.33http:///reader/full/science.33http:///reader/full/science.33


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study, rom which the institution and the UK economy will derive additionalvalue.

1.34 International education also helps to strengthen overseas business, research,social and cultural links. People in emerging economies that have learntEnglish or studied or UK qualications are more interested in working with,and doing business in, the UK than those who have not. The experience ostudents in UK education helps to create good relations that will enablesuccessul engagement with the next generation o global leaders. Moredirectly, delivering accredited courses abroad is likely to create additional

demand or UK qualications and/or educational equipment produced in theUK. British Council research supports the idea that international studentsstudying in UK universities are more likely to have a higher level o trust in thepeople o the UK.34

34 Trust Pays, British Council, 2012.http://www.britishcouncil.org/new/Documents/ull_trust_report.pd
http://www.britishcouncil.org/new/Documents/full_trust_report.pdfhttp://www.britishcouncil.org/new/Documents/full_trust_report.pdf


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Major Trends and Challenges | 25

2 Major Trends and Challenges

UK Strengths2.1 The UK has a number o truly international educational brands, many o them

with a long tradition behind them. Our independent school sector has beenattracting students rom all over the world or decades. Some schools, likeDulwich College, are now building on this by establishing new campusesoverseas. UK universities and colleges gain hugely rom the internationalreputation o institutions such as Oxord and Cambridge, or specialist arts ortechnical colleges like the Royal College o Music. Awarding organisations likeCity and Guilds, or the University o Londons external degree programme,

have operated abroad or decades. UK international qualications such as theIGCSE, O-Level and Cambridge International A level are the national secondaryexaminations in some countries (e.g. Singapore) and Pearson is the largestprivate company (by turnover) in the education sector internationally.

2.2 In the proessions, the UKs institutions, such as its accountancy bodies,command worldwide respect or their roles in setting standards o entry to theproessions and or proessional development, covering ethical as well astechnical standards. The qualications oered by UK proessional bodies areseen as benchmark standards in countries around the world. Thesequalications are valued by business and governments or the depth andbreadth o nance and business skills they teach, and by students becausethey open a wide range o international career opportunities. The Institute oChartered Accountants in England and Wales and the Association o CharteredCertied Accountants both operate across international networks and interactwith accredited trainers and huge student bodies worldwide. Similarly, UKsourced business qualications are highly valued. The UK has more triple-accredited business schools than any other country in the world, and overa third o students studying business and management here come romoverseas. Such institutions as London, Henley, the Cass (London) and Bath,have strong international reputations and proles.

2.3 The UK has an education sector that consists o independent, autonomousinstitutions with the condence and expertise to take decisions and developstrategies or themselves. This Governments reorms are reinorcing that


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tradition, opening the market to new providers and encouraging competition.In so doing they are strengthening all institutions capacity to competeinternationally.

2.4 In the school sector, the Government has strongly encouraged the growth oacademies and ree schools, ree o local authority control. This has in turnseen the growth o chains o schools, with the extra resilience that a groupingcan bring. Further education colleges have been reed rom unnecessarycentral restrictions by legislation, and are now much more able to operate trulyindependently. In addition to the support available to UK and EU students

studying at publicly-unded providers, we have enabled those studying highereducation at alternative providers to access loans or tuition ees to a maximumo 6,000. Alternative providers have made successul applications oruniversity or university college title. The University o Law became the rstprivate, or-prot university in the UK. Regent's College became Regent'sUniversity ollowing its successul application or degree awarding powers andBPP became the rst or-prot provider to gain University College Title. Degreeawarding powers have also been granted to the College o EstateManagement. Our open qualications system allows qualication bodies tocompete with each other or business, rather than reezing out innovation

through centrally prescribed and delivered systems.2.5 Science, research and innovation power

UK growth. They deliver thetechnological advances and skilledpeople that are needed to sustain anadvanced, competitive economy. TheUK delivers very high quality output inresearch and development with 14% othe most highly cited scientic articles,second only to the US. Ater accountingor its size, the UK research base is themost productive o the major economiesin terms o volume and excellence.

2.6 UK universities work with business to commercialise research. Income rombusinesses, charities and other research users was over 3.3 billion in 201011. The World Economic Forum Global Competitiveness Report placed the UKsecond in the world or university business interaction, ahead o the US.Between 2003 and 2011, 40 university spin-outs were foated on the stockexchange with an initial public oering (IPO) value o 1.79 billion and 25 were

acquired or over 3 billion.


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Challenge one lack o co-ordination between agenciesand actors

2.7 Although the UK has many strengths there are also some challenges we mustace i we want to seize the opportunities o international education.

2.8 The UKs institutions, because o their autonomy, are able to oer distinctiveprogrammes that attract students rom all over the world. However, at timesthey nd it harder to act cooperatively in their mutual interests when theopportunities are on a large scale. Many emerging economies are looking not

only to send large numbers o students overseas but also to achievetransormational change in their domestic education systems. To do this, theylook or co-ordinated expertise rom a range o organisations providing servicesto the education sector, encompassing, or example, construction services,legal advice and project nance.

2.9 There are extra benets that can come rom better coordinated activity. Forexample, when a large mining company in Saudi Arabia wanted to developboth technical and management skills in their new graduates, UKTI and theTraining Gateway joined up organisations rom both the urther and highereducation sectors. The UK was able to oer a comprehensive solution to the

company. However, it is harder to estimate the opportunities that are lost whensuch an oer has not been possible.

2.10 The Sector Advisory Group on Education and Skills (SAGES) was establishedin 2006 as the UKTI education export advisory body to support thedevelopment o agreed activities and help deliver events in key overseasmarkets. The International Education Advisory Forum (IEAF) was established in2009 in recognition o a government wide co-ordination ailure, in order toacilitate a synchronized UK Government approach to international educationpolicy and strategy. The 2011 Growth Review resulted in the creation o

HEGlobal in 2012.2.11 Nevertheless, this remains an area where the Government can do more,

recognising that any initiative rom government requires the active consent othe institutions operating in the sector.

Challenge two not structured or growth

2.12 UK education institutions have a noble history, rooted in the charitable impulseso past generations. To this day, many schools, universities and colleges havecharitable status. They consider that this is an important part o their identity,

and they discharge their obligations willingly and diligently. Although this modelhas many strengths, it does not lend itsel to rapid growth. The governancestructures and obligations o charities, or o bodies o similarly ancient pedigreeestablished by Royal Charter or equivalent instruments, were not designed to


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grow rapidly, or to run a network across the world. Consequently, many highereducation institutions are conservative in their approach to risk, in both the sizeand type o unding, viewing equity nance as a last rather than optimal resort.

2.13 It is or institutions themselves to decide their own structures. Some haveound ingenious ways to combine prot-making and non prot-making arms.Others, such as the recently created University o Law, have amended theirgovernance structures, establishing models that could be o interest to others.In some circumstances the current structures could mean that internationalopportunities are taken by other organisations with ewer constraints.

2.14 The challenge will be to ensure that decisions are not taken by deault. Apositive strategic commitment to remain at a certain size is one thing. Areluctant ossication and decline, caused by an inability to see how to changea structure that is thought to have outlived its useulness, would be quiteanother.

2.15 Planning constraints aect the sectors capacity to expand. There is a shortageo buildings dedicated to educational use, particularly in London, with localcouncils sometimes being reluctant to increase the numbers o buildings usedor education purposes. Consequently, planning restrictions prevent institutions

rom being able to expand and increase their international student numbers.This problem is most acute or private colleges in the urther education andschools sectors.

Challenge three visas

2.16 Having a clear and ecient visa system is one o the things that can aect theattractiveness o any country to any potential student. In 2011, we madechanges to the UK visa regime to address some o the past abuses whichdamaged the reputation o the sector and the quality o the student experience,

and consequently had an impact on the UK economy.2.17 We now have in place a robust visa regime that welcomes all genuine students

to the UK (provided they meet certain criteria, such as the ability to speaksucient English). We know that there have been some perceptions that theUK does not welcome students as warmly as we used to. Our key challenge isto work together to overcome these negative perceptions and to make surethat prospective students know that the UK is open or business and ullywelcomes all genuine students. We have no cap on the number o students wewant to welcome to the country and no intention o introducing one.

2.18 We ully recognise the economic, cultural and social benets that overseasstudents bring to our institutions and to our country.

2.19 The ability to work in the country o study ater graduation is also known to beone o the actors that aects someones decision about where to study. We


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must work harder to communicate to students, both existing and prospective,that there are a number o dierent routes by which they can stay on atergraduation to work in the UK. They can transer to a skilled worker visa atergraduation i they obtain a graduate level job, or apply or a graduateentrepreneur visa i they wish to set up their own business. All PhD graduateshave a right to stay on and work or up to a year ater completing theirdoctorate and there is a new scheme or up to 1,000 MBA students to stayhere or a year on a Tier 1 visa.

Challenge our competition rom new types o provider

2.20 Until recent years, education in most countries was a state-controlled business,dominated by national providers and national norms. This is changing rapidly,with the growth o genuinely multi-national companies that operate across theworld. They are a response to the rapidly growing global demand oreducation, coupled with a realisation by national governments that stateprovision alone cannot meet this demand. The business model is typically or alarge scale operation that is transerable to many countries. It seeks economieso scale and aims to oer value or money to students or governments. Thetable below shows some o the major players:

Table 2.1: Largest global education providers

Education provider 2011 EducationrevenuesUS$bn

Registeredheadquartersin

Operational in

Pearson 7.0 UK Europe, Asia,Americas

Apollo Group 4.5 US Europe, Americas

Benesse Education 3.7 Japan AsiaLaureate 3.2 US Europe, Asia-Pacic,

Americas, Middle East& N Arica

Kaplan 2.5 US Europe, Asia,

N America

McGraw-Hill 2.3 US Europe, Arica,Americas, Middle East

Career EducationCorp 1.8 US Europe, N America

Corinthian Colleges 1.7 US N America


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Education provider 2011 EducationrevenuesUS$bn

Registeredheadquartersin

Operational in

Cengage Learning 1.6 US Europe, Asia, Arica,Americas, Middle East

Houghton MifinHarcourt

1.2 US Europe, Asia, Arica,Americas, Middle East

Source: Pearson 2012 results presentation, 25 February 2013 & provider websites

2.21 Most o these providers have grown rapidly in recent years. For example, salesacross the whole Pearson group (including non-education sales) increasedrom 4.2bn in 2007 to 5.9bn in 2011, an increase o over 40%. Total revenueor the Apollo Group has risen rom $2.7bn to $4.7bn over the same period.This type o growth makes them attractive propositions or private andinstitutional investors.

2.22 Ecient exploitation o technology has been, and remains, a key eature andenabler o this growth. As the equipment becomes cheaper, and thereoremore widely-available, there is naturally an ever-increasing number o

educational tools and opportunities that can be oered electronically, and anincreasing number o suppliers that can put oers together. For example:

harnessing specialist technologies, such as haptic techniques which cansimulate touch, allowing complex and delicate manual skills to be practisedvirtually changing the way that technical expertise, rom surgery toplumbing, can be learnt. For example, an innovative haptic dentistry platormhas recently been developed as one o the projects supported by theTechnology Enabled Learning programme supported by the Economic andSocial Research Council (ESRC) and Engineering and Physical Sciences

Research Council (EPSRC) assistive technology enables those who might otherwise be excluded

rom education to participate ully. Assistive technology can also replaceexpensive one-to-one carers, reeing up these resources or use elsewhere

other technologies being developed in the UK include articial intelligence,analytics, assessment and adaptive technologies which, allied to the widercreative areas around educational publishing, broadcasting and gaming,give an excellent base to build on and exploit. The UK also has a history ocompetitive educational technology innovation, blending hardware, sotware

and pedagogy to urther exploit existing technologies2.23 UK companies are among the most innovative in the development o digital

learning resources to support teaching and learning in schools and colleges.Companies such as Pearson, Promethean, GL Assessment and Espresso are


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among the most prominent in this area. Their expertise is not only in developingthe new technologies, but harnessing them to eective educational use. TheUK has a lead in a number o specic products to benchmark pupilperormance such as such as MiDYIS, YELIS and ALIS and RaiseOnline. It alsohas a lead on school management inormation systems. The EuropeanEdTech Top 2035 listing o the astest growing and most innovative e-learningcompanies published in June 2013 included ten UK companies in the top 20.

2.24 The recent development o Massive Open Online Courses (MOOCs) in highereducation has raised the prospect that new technology might undamentally

change how education is delivered. At present the main names are US-based Coursera, Udacity and EdX. They combine world-leading education brands(Harvard, Stanord, MIT) with the technological capacities o Silicon Valley andthe Massachusetts cluster, and resources rom venture capital or rom large-scale philanthropists like Bill Gates. Their ambitions, and potential reach, aretruly global. It is probably already easier, as well as much cheaper, or a studentin rural India to access a physics course at MIT on-line, than to access one inIndia.

2.25 While nobody can say with certainty where these disruptive new businessmodels will lead, it is clear that major changes are aoot and that education

is becoming a genuinely multi-national industry, attracting more and moreinvestors interested in large-scale global expansion. This change oerschallenges, as well as opportunities, to established UK providers. In particular,they need:

the autonomy, fexibility and entrepreneurial approach to search outopportunities and respond rapidly

an ability and willingness to orm partnerships and cooperate where that isthe best approach to secure an opportunity including cooperating acrossthe old public-private boundaries, and contemplating growth where

appropriate access to extra investment i required, and an understanding o how to

strike mutually benecial deals with investors.

Challenge fve Stronger country-to-country competition

2.26 As well as stimulating growth in new types o education provider, theinternational demand or education is also stimulating growth in the countriesthat want to promote themselves in this market. Typically, that means countriestrying to attract more students rom overseas to come to them to study,because that is what produces the largest and most visible nancial benets tothe country concerned. For some countries, this is an intensication o activity

35 http://edxusgroup.com/europes20astestgrowingandmostinnovativeelearningcompaniesnamed2/
http://edxusgroup.com/europes-20-fastest-growing-and-most-innovative-e-learning-companies-named-2/http://edxusgroup.com/europes-20-fastest-growing-and-most-innovative-e-learning-companies-named-2/


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that is already well-established and backed up with large marketing budgets.There is also growing interest rom countries that didnt previously compete inthe education market including oering courses in English even where it is nottheir rst language.

Australia is aiming to host around 520,000 students by 2020, studying across alleducation sectors and contributing around GBP 13.1 billion to the localeconomy. They intend to do this through: better coordination; increasing quality;providing a positive student experience; partnerships; ensuring integrity;Australias student visa programme; data analysis and research in international

education; and competition, marketing and promotion.

Canadas goal is to double the number o international students to 478,000 by2022. Canadas strategy ocuses on: targets or success; policy coordination andensuring sustainable quality: promotion o education in Canada; investments; andinrastructure and support.

In the US, the Immigration Reorm Bill is projected to cut the US decit by almost$200bn over 10 years and as part o this, the US is liting restrictions on thenumber o international students that could study at US higher educationinstitutions. The US State Department gives diplomatic, security, advertising,quality assurance and some nancial support to American schools overseas. ItsOverseas Advisory Council involves senior US corporations in supporting USeducation or its nationals and or expanding overseas business.

Other countries that are not traditional competitors o the UK, particularly otherEuropean countries, are looking to increase their share o international students.France is considering a change to legislation which would allow Frances publicuniversities to oer courses in oreign languages. The aim is to make Frenchuniversities more attractive to oreign students (and complements another legalchange rom last year which lited restrictions on oreign students right to work in

France). Similarly, the Netherlands has over 1,500 international studyprogrammes available, 75% o which are taught entirely in English, and Germanyare becoming increasingly competitive by oering courses in English andproviding job opportunities or international graduates.

2.27 The expected growth in the potential global market suggests that the UK cancontinue to increase numbers o international students, even as other countriesalso increase theirs. The UK's current market share o international highereducation students is 13%. Given that, it is likely that UK overseas highereducation student numbers will increase by 15-20% over the next 5 years.However, achieving this will be challenging. The UK needs an oer, and acoordinated approach, that matches that o our competitors.


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Challenge six Changing customer relationships2.28 Forecasts suggest that Asia, Latin America and Arica will provide the majority

o growth in education in the 21st century. Naturally there is a strong correlationbetween countries with high growth in 16-22 year-olds and increasing demandor secondary education, vocational qualications, higher education, languagetraining and other educational services. By 2020, our countries will account orover hal o the worlds 1822 population: India, China, US and Indonesia. Aurther 25% will come rom Pakistan, Nigeria, Brazil, Bangladesh, Ethiopia,Philippines, Mexico, Egypt and Vietnam. India and China are expected to send

the most students abroad, but many other o the astest-growing countries arein a dierent position.36 Their students are not expected to study abroad inlarge numbers. This suggests that any country or supplier that wants to benetrom the steep growth in urther and higher education demand rom, say,Indonesian students, will have to reach them in Indonesia.

2.29 New relationships will increasingly emerge, between countries with a demandor education, and countries looking to supply it. Some o this demand willcome rom industry looking or individuals to meet their skills needs. Thesuppliers will need to be increasingly ocused on what these markets want, andwhere they want it. That is likely to mean education delivered in their owncountry, supplemented by partnerships that support research and innovation.While emerging economies will continue to send some students overseas, theirocus will be on transormational change in their domestic education systems.

2.30 That oers the opportunity or serious strategic partnerships, possibly on alarge scale. For example, Saudi Arabia spent 28 billion in 2012 and hasbudgeted 34 billion in 2013 to nance construction work on 742 new and2,900 existing schools, 40 new colleges and new acilities at universities. Insuch a market, there are opportunities not only or the usual providers oeducation, but or many other services such as construction, legal advice, or

project nance.2.31 Education is a proven way o building relationships and trust between

countries. As emerging powers gain economic and educational clout, providercountries, like the UK, will need to ensure that the tone o their engagement isone o genuine partnership bringing mutual benet. The emerging powers willbe selective, and demanding, in what they expect rom providers. Providers,both countries and suppliers, will need to ensure their products meet the needso their target markets. For example, in the ELT sector, UK providers will needto consider the type o English and examination that dominates their target

markets, and ensure they oer the relevant qualication. At national level, the

36 The shape o things to come: higher education global trends and emerging opportunities to 2020 BritishCouncil, 2012.
http:///reader/full/position.36http:///reader/full/position.36http:///reader/full/position.36


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UK will need to demonstrate that it is really thinking about what a partnercountry wants, and how its aspirations can be met.

2.32 Individual institutions and companies engage in education export activity allover the world in line with their own institutional and corporate strategies andthis must continue. But in certain countries, there is also a real opportunity orthe UK to bring together the strength and depth o the whole education sector as well as other sectors that support education exports like nance,construction and law to oer system-to-system engagement.

2.33 The countries where this is likely to be appropriate are those where:

demographic changes are driving demand or a rapid increase in educationprovision; where economic growth means substantially increased investment ineducation is possible; and where the political environment creates an opennessto international collaboration on education provision. Additionally, it makesmore sense to ocus on countries where there are currently barriers to theexpansion o UK provision rather than those where UK activity is already strongor expansion can take place without government support.

2.34 Through oering a co-ordinated system-to-system approach to engagement,we hope to:

generate income rom international education activities increase our ability to infuence a wide range o agenda, including oreign

policy goals that are not primarily economic

support internationalisation o the UK education sector, leading to linksbetween researchers and teachers that will enhance the quality andreputation o UK education.

2.35 We have identied eight priority countries and one region or internationaleducation. These are China, India, Brazil, Saudi Arabia, Turkey, Colombia,Mexico, Indonesia and the Gul. More detailed analysis o why these countrieswere selected can be ound in the supporting analytical narrative.


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The Policies | 35

3 The Policies

A warm welcome or international students

As shown in earlier sections, the UK gains hugely rom students who cometo this country to study. That market has grown sharply in recent years butother countries are competing more strongly with us, and there remainsome misunderstandings about UK visa rules and the opportunities orstudents to remain here ater fnishing their studies.

We consider it is realistic or the number o international students in highereducation in the UK to grow by 15-20% over the next 5 years. The number

o internationally mobile higher education students globally is orecast toincrease, however there is expected to be increased competition or thesestudents rom other countries. Thereore, the UK requires a competitive,sustainable core oer rom the UK to all overseas students, which is wellcommunicated and delivered. It also requires initiatives to support partnercountries in sending more o their best students to the UK, and therebybuilding better long-term bilateral relationships.

Providing a competitive visa system

3.1 The Coalitions Mid-Term Review stated there is no cap on the number ostudents who can come to study in the UK, and there is no intention tointroduce one. Moreover international students who obtain a graduate level jobcan stay ater their studies on a work visa, and are exempt rom the cap oneconomic migrants. Their employers do not need to test the local labourmarket beore employing ormer international students, provided the job is atthe right skills level and paid an appropriate salary. Those who wish to stay todevelop a business idea can do so under the Graduate Entrepreneur scheme,to which we recently added an additional 1,000 places or MBA students.

In April this year we introduced the Doctorate Extension Scheme, which allowsthose completing PhDs and other doctoral qualications to stay or a year towork, gain experience in their chosen eld, or set up as an entrepreneur.During their studies, university students can gain paid work experience in


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casual jobs or on ormal work placements, and there is also scope to dointernships.

The Graduate Entrepreneur scheme was launched in April 2011. It allowsgraduates who have demonstrated entrepreneurial fair and have a goodbusiness idea to stay in the UK or up to two years ater graduating. For 2013/14there are 2,000 places in the scheme. Graduates applying to take part must beendorsed by their higher education institution. Business ideas so ar include thedevelopment o a test or assessing an individuals risk o skin cancer, a newcollaborative approach between the private and public sector to create aordable

housing, a community interest company that creates clean water projects inPakistan and the manuacture o solar lights to eradicate the problems oelectrication in rural India and Arica.

3.2 While being clear that all legitimate students are welcome, without a limit onnumbers, the Government is equally committed to eliminating the immigrationabuse and poor standards which aected international students in the past. Areorm o the visa regulations and the educational oversight regime or collegessponsoring international students in 2011 has been eective in rooting out

abuse and improving standards, so institutions and prospective students areoperating within a stable and transparent system.

3.3 Government in conjunction with Universities UK, the British Council and otherpartners will work to promote the message that there is no limit on the numbero legitimate students and the policies to support PhDs and graduateentrepreneurs who want to remain in this country ater nishing their studies.

The GREAT Britain campaign is the Governments most ambitious internationalmarketing campaign ever and showcases the very best o what Britain has tooer in order to encourage the world to visit, study and do business with the UK.

It is part o the Prime Ministers global race or growth and supports the UKsOlympic Legacy programme. GREAT draws together the work o UKTI,VisitBritain, British Council and the Foreign and Commonwealth Oce into aunied campaign. It aims to deliver signicant and long-term increases in trade,tourism, education and inward investment in support o the Governmentsprosperity and growth agenda. Through GREAT, campaigns promoting UKeducation in a number o priority markets including China, Brazil, India, the USA,South Korea, Indonesia and emerging nations within Europe are being jointlydeveloped by the British Council, UKTI and the Foreign & Commonwealth Oce.A new Education is GREAT Britain campaign pillar has now been created and isdescribed later in this strategy.


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The Policies | 37

3.4 The Government is consulting on how temporary migrants rom outside theEuropean Economic Area (including students) might contribute to the costs otheir healthcare.

Reinorce protection or overseas students coming to the UK

3.5 In some overseas countries, agents are routinely used to match potentialstudents with UK institutions. While many agents enjoy a strong and reputablerelationship with UK institutions, others can seek to act in an unscrupulousway, risking a potential students chances o obtaining a UK visa. The British

Council has a programme or training agents and a supporting programme ocontinuing proessional development. 3,600 agents around the world haveundertaken this training. The UK (along with Australia, Ireland and NewZealand) has agreed to a Statement o principles or the Ethical Recruitmento International Students by Education Agents and Consultants known as theLondon Statement. Each country is working towards implementing theprinciples this sets out.

3.6 International students in the UK need to be able to get help when things goseriously wrong while they are here. This requires a response both romgovernment and their host institution. For example, rom time to time, confictin their home countries can cause students anxiety, as well as practicalproblems like accessing money rom home and renewing visas. This iscurrently the case with students rom Syria. We want students to be able tocomplete their courses when this happens. BIS has set up a cross-Government Responding to International Students Crises (RISC) committee.It will monitor emerging crises, identiy where cross-government action isrequired and acilitate the taking o that action. BIS, the Home Oce, FCO,Universities UK, the Higher E