Demand for university education is on the decrease, mainly due to demographic factors. This trend, combined with a rise in the breadth of diversity of the educational offer, has caused an increase in competition within the higher education sector of Western European countries. Competition is happening, both nationally and internationally, to attract new students. Moreover, these universities must deal with a drastic reduction in public funds available to finance their activity. This, in turn, further increases the competitiveness between them. Meanwhile, the European Higher Education Area (EHEA) agency is contributing to enhance the attractiveness of European universities to non-European students.
In this context of growing competition, the export of higher education can be an activity that generates both economic and non-economic benefits to the universities. It is therefore essential to understand the factors determining the international demand for higher education. The research I have recently developed under the direction of Jon Barrutia Güenaga, professor of management and business economics at the University of the Basque Country UPV/EHU, Bilbao, Spain, aims to shed light on this issue.
In our work we set out to identify the variables that make a country or a university more attractive to international students. Specifically, we studied the attractiveness of European countries as well as the ability of the Spanish universities to attract such international students
Factors: geography and investment
We found that there are several determinants of international demand towards higher education any given country. We have noticed that the geographical location in Europe of the higher education institution matters. Overall, the countries of northern Europe, as in other economic and social spheres, are more attractive as sources of higher education.
Similarly, we have found that both, the investment made at all educational levels and the specific investment made in tertiary education, are key variables to explain the attractiveness of the university system of each country. In general, countries that devote more weight to such investments are the most attractive for international students.
The results of our study also show a positive correlation between the level of investment in R&D and international demand for higher education in a country. In general, countries placing greater emphasis on investment in R&D are the countries with the highest proportion of international students. This suggests that the international demand is sensitive to the existing relation between R&D and tertiary education. A greater or lesser budgetary contribution to R&D generates a parallel behaviour in terms of demand in higher education.
Our findings thus indicate that governments intending to promote the international attractiveness of their tertiary education systems ought to boost investment in education and R&D.
We also observed a positive effect in the existence of local competition. Universities subjected to a higher level of competition in their immediate environment are also the most attractive internationally. One interpretation is that these universities are more encouraged to attract foreign students as a way of compensating for the shortfall of demand due to demographic trends and the plurality of the local offer. Therefore they are more sensitive to the local competition. They do not consider the international scene as an opportunity. But rather as a possibility, should traditional ‘captive customers’ vanish.
Branding is key
Another finding of our study is that the quality or impact of scientific production does not appear to be determinant of international higher education demand. However, the volume of scientific production per teacher does influence the international demand. It appears that a greater volume of scientific production generates global visibility. This, in turns, benefits the brand of the university. Eventually, better brand recognition increases universities’ ability to attract international students.
The impact of globalisation in international demand for higher education—which stems, among other things, from an increase in competition for talent and the best intellectual capital—will ultimately bring a new ranking of world’s universities.
Virginia Rincón Diez
Lecturer in commercial research at the University of the Basque Country UPV/EHU, Bilbao, Spain.
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