UK universities and colleges are in danger of being squeezed out of the burgeoning multibillion-pound overseas student recruitment market, the British Council has warned.
Major competitors such as Australia and the US are threatening to eat into UK institutions' significant share of the quality end of the market while new players in Europe and Asia are beginning to cherry-pick niche areas, according to a consultation document.
The threat comes just as UK institutions are planning to cash in on predicted exponential growth in demand for international education.
A joint study by the British Council and its antipodean equivalent, IDP Australia, due to be published in the new year, forecasts that the number of international higher education students in the UK could grow nine-fold over the next 20 years.
It says numbers could rise from just over 142,000 in 2001-02 to 677,000 by 2015 and 1.3 million by 2025. There is also potential for another 1.4 million on UK higher education courses delivered overseas by 2025.
Some institutions are planning to plug their funding gaps with expected additional income from overseas students. The financial pressure to do so would be increased if the government fails to get its higher education bill introducing £3,000 a year top-up fees for home and European Union students through Parliament next year.
University College London is already preparing to replace some home students with more from overseas. Its vice-provost, Michael Worton, said:
"There is an enormous funding gap, and if there are further compromises on the HE bill, we will have to look for other sources of income, including overseas students."
Michael Sterling, vice-chancellor of Birmingham University and chairman of the Russell Group of research-led universities, said: "The fact of the matter is that we are collectively projecting significant increases in income from overseas students, and the government is encouraging us to do that."
But the British Council warns that the UK education system is not yet geared up either to capitalise on the growing demand, or even to protect its current stake in the market, estimated to be worth £1 billion a year to institutions and £8 billion a year to the UK economy.
Its report, Education UK: Positioning for Success , says the UK has significantly strengthened its international position, thanks in part to promotional efforts through the Prime Ministers' Initiative (PMI), launched in 1999 to attract 50,000 more overseas higher education students and 25,000 into further education by 2004-05. Latest figures indicate the targets are likely to be exceeded.
But the report warns that there is evidence that UK institutions may not be able to take or attract many more overseas students.
A survey by Mori for the British Council found that two-thirds of 110 UK international officers thought their institution was able to accommodate a slight increase in overseas student numbers, while some indicated they were already approaching capacity.
The report warns this is bad news in light of new multimillion-pound marketing campaigns recently launched in Australia and the US targeting students interested in top-quality courses, traditionally the UK's prime patch. The threat is "rising dramatically" from new entrants to the market offering courses delivered in English, including Germany, France, Finland, Japan, Singapore and Poland, the British Council says.
Competition is also intensifying from the private sector.
Neil Kemp, the British Council's promotions director, said the UK needed to respond quickly with its own new marketing initiative, doubling its PMI budget to at least £5 million a year from 1995.
He said: "UK institutions are now dependent on the funding international students bring. But we do not have a God-given right to expect 200,000 of them to turn up each year." <P align=center> THE VIEW FROM ABROAD
- Scottish universities should target the overseas student market by promoting their distinctiveness from England, a report is set to recommend, writes Olga Wojtas.
- The Scottish Solutions report from the enterprise and culture committee is expected to highlight the sector's capacity to market itself as a global brand, boosting its role as an economic driver.
- The report, due out this week, comes from a six month investigation into the impact of the English higher education white paper north of the border. The committee was also expected to play down press speculation that Scotland could charge English students the equivalent of top-up fees to avoid being swamped by "fee refugees".
- It is understood that the committee does not believe there is a serious threat and is likely to oppose any artificial barriers or quotas that would undermine recruitment.
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Lured by the music but not the weather
The largest and most in-depth survey of overseas students studying in the UK has produced conflicting images of a post-16 education system that is of high quality but expensive, inclusive yet elitist.
The British Council commissioned Mori to ask 7,600 people from 32 countries what they thought of UK further and higher education and how it compared with what was on offer in the US and Australia. International officers in 110 UK institutions were surveyed.
The survey was designed to measure the success of objectives set by the British Council as part of the Prime Minister's Initiative, launched in 1999, to attract 50,000 more HE students and 25,000 more FE students to the UK by 2004-05.
Selling UK brand
The British Council launched the Education UK brand in the year it took up the PMI challenge. The aim was to "sell" UK education as affordable, accessible, welcoming and world class. But Mori found that awareness of the brand was "fairly limited".
Only 10 per cent of students surveyed described UK education as affordable. Three-quarters said it was expensive.
First impressions
Just over half described UK education as "high quality". But the perceptions of quality dropped once overseas students joined their courses.
The report says: "At this stage... they are more likely to think that the US is more innovative."
Nevertheless, a third of students said their education allowed them to fulfil their potential.
More than a third saw the UK as "welcoming", although nearly a fifth saw it as "old fashioned".
Twelve per cent said the education system was elitist.
Study experience
Many overseas students move from education systems that rely on "cramming" to a less teaching-intensive environment in the UK. The report says: "More work needs to be done with students once they are in the UK for them to see the benefit of the ways they are studying."
More than a third of students felt the UK system was accessible, but 16 per cent described it as "inflexible".
Why study in UK?
The key motivating factors for studying overseas in general were for better-quality education, to experience another culture and to gain an internationally recognised qualification. Improving language skills was also a concern.
More than three-quarters of those surveyed cited the reputation of institutions and qualifications as reason for studying in Britain.
The UK's lifestyle was the next most important factor. Some 10 per cent said its music scene was an attraction.
How UK compares
The study compared students' perceptions of the pros and cons of UK study compared with the US and Australia.
Students were put off by Britain's climate, by starchy traditions, reserved people and, in some cases, racism.
On the plus side, Britain was seen as a gateway to Europe, safe and easy to travel around, culturally rich and "tolerant of Muslims". Australia was seen as warm and relaxed, but racist towards Asians. The US is perceived as offering opportunity and nice weather, but greater immorality.
Information points
The survey found that for most overseas students the internet is the first port of call when gathering information on studying abroad. But the most influential sources are family, friends and first-hand accounts of experiences.
Three-quarters of overseas students studying in the UK had used the British Council information services and 41 per cent had used the Education UK website. Three-quarters had also used services provided by institutions.
Visas
The report says "great strides" forward have been made in processing visa applications.
Two in five students considering UK study think it will be easy to gain a visa. A similar proportion think it will be difficult.
Of the 55 per cent of applicants who gained a visa, more than two-thirds said the process had been easy.
Capacity
A third of international officers said their institutions could cater for a greater number of students. But some said they were at full capacity in certain subjects.