Is a UK funding crisis an effective mechanism to spur on the ‘education as a global growth industry’ development agenda?

Amidst a discursive struggle this week over the state of finances for higher education and research in the UK, which reached a crescendo two days ago (e.g., see ‘Universities face meltdown – and all of Britain will suffer‘; ‘Higher education will be ‘on its knees’ after cuts‘), I could not help but note what Prime Minister Gordon Brown had to say in a speech (‘Education as a global growth industry‘) on 14 January:

Today, I also set out our commitment that, working in partnership with you, and our schools, colleges and universities, we will support a major expansion of their activities across the world.  Central to this is a new ambition, which I am setting today for Britain, that we double the value of our higher-education exports.

We will do this in four ways.  We will welcome students here to Britain on the basis of merit and ability – of course with all the proper checks in place.  We are determined to stamp out abuse of student visas and I announced last year we will shortly bring forth proposals on this.  I emphasise that all students that come here legitimately, to benefit from our UK education system, will be made welcome, because we are not prepared to put legitimate language courses, and schools and colleges out of business or set back our efforts to expand our educational trade.

Secondly, we want to reinforce and build on the international standing of our qualifications, by offering examinations and qualifications that are rightly highly regarded around the world.

Thirdly, we will work to develop partnerships between UK institutions and universities in many different countries around the globe.  Already over the last four years, we have promoted thousands of new partnerships across all sectors, from schools linking to post graduate research through our initiatives for international education.  In a global knowledge economy, we know we will thrive, not just by developing our own knowledge, but by taking knowledge and sharing it with the billions of people who understand that education is the key to survival and success.

Fourthly, we will use distance learning to build on the work of our excellent universities that are already making use of great and rapid advances in the relevant technology.  As I said, in our higher-education strategy, we welcome and support the work of the group chaired by Lynne Brindley.  This task force is looking at how we can expand and develop the use of IT and online learning, not only in the UK, but across the world.  Across higher education, we will want to ensure that we maintain and enhance world-class standards in everything we do in our international activities.

This is not about chasing money; it’s about leveraging our higher education system to offer the highest-quality opportunities across the world.[my emphasis]

This argument was matched, on the same day, by Peter Mandelson (the UK’s Universities Secretary) who suggested in The Guardian (‘Our universities are not under threat. Their income is at record levels‘) that:

The Russell Group can take much credit for the world-class standard of British higher education today. But the government inherited a badly underfunded university sector in 1997, which a former Conservative education minister described as “poorer pay, degraded facilities, less money to support the teaching of each student”. This government’s agenda for universities has included more state funding than ever before – an increase of over 25% since 1997. It is against this backdrop that British universities have developed into some of the very best in the world and are a critical part of our knowledge economy.

But this wasn’t simply on the back of state funding. In fact, while government spends £12.3bn on higher education today, total university income from all sources was over £23bn in 2007-2008. Government incentives have pushed universities to seek new forms of income from donations, international students and commercial engagement with industry. These are consistently rising. The decision to introduce tuition fees in England has also provided a new source of income. [my emphasis]

Mandelson carries on to note:

It is for universities themselves to identify where savings should be found, and they are as free as ever to focus on their research excellence and institutional strengths. The search for greater efficiencies should include more part-time courses and a greater range of one- or two-year degrees.

As I discussed earlier in GlobalHigherEd (‘Learning from London‘) the export earnings logic is already putting pressure on some UK higher education institutions, such that they are being driven the create new postgraduate [graduate degree] programs that have hundreds of Masters students supported by a small coterie of faculty.  And I subsequently heard, in response to my ‘Learning from London‘ entry, that some London-based Masters programs have faculty sign contracts with students denoting exactly how many hours of “contact time” students can expect (it was a shockingly small number of hours per degree…something like 5 hours for the entire MA, assuming they follow through with the promised hours).

Now, as we also noted in ‘Taking note of export earnings‘, this global growth industry agenda is underlain by an ideological shift:

We would argue that these numbers are being constituted, and debated about, in the context of an ideological transition – one that increasingly enables views to emerge of higher education as a driver of economic versus cultural-political change. For example, a decade or two ago, it would have been impossible to imagine creating tables such as the one profiled in Kate Geddie’s entry in GlobalHigherEd in which education is measured against ‘scrap plastics’ or ‘chemical woodpulp’. Thus, a new organising logic, to use Saskia Sassen’s phrase, is emerging: one that reframes higher education as an urban/national/global services industry, for good and for bad.

Assuming we are right (of course we might not be!), it is interesting to think about how effective a state-enabled fiscal crisis for higher education institutions (in the range of a 12.5% cut so far, then 6.3% in succeeding years over three years “taking the total to about 30%”) will be in propelling this export agenda along.  To be sure there is a broader fiscal crisis in UK public finances, but can it really be ameliorated on the backs of UK universities (and students, local and foreign)? All savings via higher ed cutbacks are significant, but in the big picture they are not that significant for the overall UK budget.  But the transformation of the values shaping higher education policy, including enhanced state control versus greater autonomy for HEIs, is much more significant, more noteworthy, and certainly worth deliberating about. And the function of the crisis – a “politically mediated moment of decisive intervention and structural transformation” to use Colin Hay’s words* – is also worth unpacking.

In the end, is a UK funding crisis an effective mechanism to spur on a quality-oriented ‘education as a global growth industry’ development agenda? Will it provide a defacto or by design opening for private sector providers into the UK ‘market’, as it is doing now in the US (e.g., see Changing Higher Education‘s ‘For-profit higher education moves to fill gaps left by state budget shortfalls‘)? And who gains and who loses in the process? For example, can those 16-17 faculty and 13 teaching fellows (3 with PhD) I profiled in ‘Learning from London‘ take on even more that the “almost 400” masters students they already have to cope with, support, mentor, and educate?  Something has to give, doesn’t it?

Kris Olds

* Hay, Colin (1999) ‘Crisis and the structural transformation of the state: interrogating the process of change’, British Journal of Politics and International Relations, 1(3): 317-344.

Measuring the economic value of Canada’s international education “industry”

Yesterday, Canada unveiled a report assessing the economic contributions that international students make to the country. Entitled Economic Impact of International Education in Canada, the report was presented by Stockwell Day, the Minister of International Trade and Minister for the Asia-Pacific Gateway, at a meeting of the Association of Universities and Colleges of Canada (AUCC).

Highlights from the report include the following:

• In 2008, international students to Canada contributed $6.5 billion (CAD) to the national economy, provided 83,000 jobs, and contributed $291 million (CAD) in government revenue
• This estimate is based on tuition fee payments, accommodation costs, and discretionary spending for international students from the K-12 to post-secondary levels
• While all provinces receive incoming students and report financial gain, Ontario and Quebec receive the lion’s share, with nearly two-thirds of all international students coming to Canada going to these two provinces
• Nearly 40% of all revenue comes from the top two source countries: China and South Korea
• The total value of international education is higher than the value of national exports in coniferous lumber ($5.1 billion) and coal ($6.07 billion)

Three other entries have recently been made on this blog on similar research conducted in different national contexts: Australia, New Zealand, and the United States. That Canada has joined these countries in the calculative process of determining the economic value of international education is significant for a few reasons.

First, while the state has multiple rationales underlying its promotion of international student mobility – ranging from international diplomatic and academic exchange ideals, to generating both short and long-term as well as direct and indirect economic benefits – the public discourse in Canada has hitherto tended to emphasize education as a (largely) publically-funded sector. In commissioning a report that emphasizes the economic contributions of international students, and the relative economic contribution of education services (e.g., see Table 15 from the report below), the Government of Canada seems to be showing a growing willingness to frame international education as an emerging export industry.

Second, education is a provincial responsibility in Canada, so policies and initiatives have tended to be decentralized. The Department of Foreign Affairs and International Trade’s (DFAIT) interest in developing a national agenda for international education has been manifest in the past few years, most clearly evidenced with the launch of the “Education in-au Canada” branding campaign last year. In commissioning a report that quantifies the overall export industry’s value, one can assume that this report serves in part to support the continued inclusion of education as a component of DFAIT’s Global Commerce Strategy. Moreover, the report prominently displays the financial contributions that international students make to provincial government revenues, a distinction that I have not seen made in other reports. One can further speculate that this inclusion is due to continued debates within and between various levels of government on the value of supporting the expansion of international education. (It should be noted that the report also says the provinces of British Columbia, Manitoba, and Nova Scotia had previously conducted similar research on their own.)

Lastly, it is worth reflecting on the fact that the report was commissioned by DFAIT but prepared by Roslyn Kunin & Associates, Inc., a private consultancy firm. As GlobalHigherEd has noted in previous entries on this topic (e.g., on New Zealand), other jurisdictions have adopted similar arrangements, but this still raises questions about private firms acting as knowledge brokers for the state, producing reports that can act both as analytical devices and lobbying tools. Given that each of the national reports reviewed on GlobalHigherEd are drawn from very different data sources and based on different modeling techniques, it also raises questions about the international comparability of such figures, and their potential role in benchmarking a country’s position vis-à-vis “competitor states” in the global international education market. For example, Canada’s report (that was produced from secondary data sources) cites annual contributions as $6.1 billion (CAD), whereas the US returns (as noted in a previous entry) are calculated to be $15.5 billion/yr (USD). Considering that some estimates put the United States as receiving 22.8% of all internationally mobile students, while Canada receives just 3%, there are clearly different data, assumptions, and perhaps intentions, underlining these reports.

Kate Geddie

Editor’s update: link here for the press release of the newest US report (‘International Students Contribute $17.6 Billion to U.S. Economy‘) which was released by NAFSA on 16 November 2009. The report was produced by Jason Baumgartner who wrote a 13 May 2009 entry (‘Economic benefits of international education to the United States‘) in GlobalHigherEd.

GATS, TRIPS and higher education: projects, politics and prospects

The World Trade Organization (WTO) and two of its agreements, the General Agreement on Trade in Services (GATS) and the Trade Related Intellectual Property Services (TRIPS), have emerged as important features of the global higher education landscape.

However, despite the importance of the WTO and its Agreements, many of us working in the sector have either very little, or at best very sketchy, knowledge about GATS and TRIPS as projects, their politics and what might be the likely prospects for the future. Even our sketchy knowledge tends to be shaped by media images largely around the biennial Ministerial Meetings for the WTO; from clashes with riot police in Seattle in 1999 (see below) to more recent arrests in Hong Kong in 2005.

GlobalHigherEd will carry a series of feature pieces on the WTO’s GATS and TRIPS Agreements, beginning here with a brief outline of the World Trade Organization and the emergence of the GATS and TRIPS Agreements in 1995.

Although the WTO is a new international organization, its origins are rooted in the General Agreement of Trade and Tariffs (GATT) of 1947. In the Uruguay Round of the GATT (1986-1994), it was decided that the international trade rules should pay more attention to the trade of “invisibles”, such as intellectual property, services and knowledge. These elements were more and more important for the world economy and were not covered by the GATT’47. To manage these new complexities, a single trade agreement was not enough. So, it was necessary to create an international organization, the WTO, which contemplated new trade agreements to fill the GATT gap: the TRIPS and the GATS. Currently, the WTO has 151 member countries. These countries have committed themselves to respect the norms and disciplines of the WTO agreements, as well as to promote progressive trade liberalization in the areas covered by the agreements.

In addition to the scope, another important difference between the GATT and the WTO is related to the dispute settlement procedure. The dispute settlement system of the WTO is regarded as much more efficient than the old system because of new procedural innovations. This also makes the WTO more powerful in enforcing trade agreements and consequently obliges member countries to be careful about respecting the content of the trade agreements.

Finally, another important difference between the GATT and the WTO can be found in its political character. In the framework of the WTO, the liberalization principle is stronger than in the original GATT. This Agreement, created in the post-WWII context, instituted a commercial regime of Keynesian embedded liberalism. But the WTO, created in a moment of neoliberal climax, clearly breaks the balance between the global liberalization objective and the capacity of states to deliver their legitimate social purpose. The fact that the WTO covers public services, such as health and education, as well as other public goods such as knowledge, significantly increases the social implications of this political shift in the international trade regime and one that GlobalHigherEd will be exploring in detail.

Both the presence and the politics of the WTO and its embrace of education–including higher education–as a new tradeable services sector is not only far reaching, but has important implications for academics’ everyday work and for how the sector is constructed and regulated. For these reasons, those working in the sector should have at least a working knowledge of the GATS and TRIPS processes so that they can either mediate or intervene in debates. We hope this series  will help you contribute to this debate.

Susan Robertson and Antoni Verger