Size matters in overseas success

Large pre-1992 institutions on UK mainland make most money abroad, says study. John Gill reports

May 15, 2008

The formula for a university's success in attracting overseas income has been revealed, a study claims.

The research suggests that the ideal attributes for an institution to succeed abroad include a large student base and a high volume and good reputation in research.

But being a post-1992 university, having a high profile in public-sector professions or being based outside the UK mainland will not help, the researchers found.

Having a medical school was not found to be significant, nor was the institution's subject mix.

The analysis was carried out by brothers Iain Smith, an educational statistician at the University of Strathclyde, and Alasdair Smith, former vice-chancellor of the University of Sussex and now a research professor of economics at the university.

The pair based their study on Times Higher Education's analysis of the financial health of the sector, published last month and prepared in conjunction with accountants Grant Thornton, which listed each institution's overseas income.

They found that size, both in terms of student numbers and research, was the most significant factor. On average, for every £1 million of income from the Higher Education Funding Council for England, which is determined by student numbers and research quality, institutions typically generated an associated £170,000 of overseas income, they said.

The analysis suggests that being a new university "costs" institutions on average about £3.8 million of lost annual overseas income in comparison with their pre-1992 rivals.

The report says: "The effect is quite marked and definite and sector-wide; for the most part, stick around for a while and the world will know of your existence."

A base on the UK mainland was found to be beneficial, with both Queen's University Belfast and the University of Ulster doing worse than would otherwise be expected.

The study concluded that, all other things being equal, universities in Northern Ireland made about £14.7 million less than UK mainland institutions each year overseas.

Debunking a "common and plausible" hypothesis, it found that an institution's subject mix had little bearing on international earnings.

It also found that having a top-ranked business school was beneficial, but merely having a business school was no guarantee of boosting income.

This was attributed to an "indiscriminate proliferation" of business schools over the past decade, particularly in the post-1992 sector, which the study suggested may prove to be poor investment by the universities concerned.

Using data from the Higher Education Statistics Agency for teacher education to indicate the effect that a focus on public-sector professions may have, the study found that for every 10 per cent devoted to this area institutions made about £9.5 million less overseas.

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