Transnational Education: Financial lifeline or zero-sum game for UK Higher Education?

In fact, it has existed for over two decades with 96% of UK Universities now delivering TNE as a part of their offering. In 2022/23 alone, more than half a million students accessed UK Higher Education (HE) through TNE. The distribution of students is heavily skewed, however, with 16 institutions accounting for 51% of total TNE enrolments. As media scrutiny on university finances intensifies, questions arise: can increasing TNE engagement be a silver bullet for addressing funding concerns? Or are TNE host markets already too saturated with limited space for growth?

In 2021, UK TNE generated £2.4bn, equivalent to 10% of tuition fee and education contract revenue. This figure has grown 123.9% since 2010 (adjusted for inflation), highlighting the dependence of UK HE on this delivery model. In addition to revenue, TNE raises the institution's reputation globally, enables collaborative international research projects and access to corporates internationally.

However, TNE is undeniably resource intensive, with relationships and building university status in a new market taking time. We are seeing HE providers at vastly different stages in this integration journey, reflected by their TNE offerings and current student numbers. Names like the Open University & University of London are market leaders currently, but will we see the emergence of new players from UK HE?

Delivering transnational education

TNE is primarily delivered remotely online and via collaborative provision (dual/joint degrees), with overseas campuses less prevalent. This collaboration is advantageous to host countries in accessing world-class higher education, addressing gaps in domestic provision, and providing affordable alternatives to studying abroad.

As competition in TNE flourishes and host countries raise their domestic educational offerings, does UK TNE have headroom to grow further? Gross Enrolment Ratio (GER), a UNESCO measure of global participation in tertiary education, proposes demand should not be a problem. GER has doubled to 40% from 19% between 2000 & 2020, suggesting there is still capacity in international tertiary education. Alongside this, a key consideration is the UN Sustainable Development Goal (SDG) 4, aimed at achieving quality education for all. What role does TNE play in fostering this and will the GER growth trajectory continue? How can UK HE providers standout from the competition?

Offshoring UK higher education

From a political standpoint, since 2017, a cap on domestic undergraduate student fees has seen UK Universities expand the uncapped international student population (25.8% of total enrolments in 2022/23). UK government visa legislation threatens this trend, leading investigation into alternative income streams. TNE provides a less contentious option, through offshoring rather than onshoring delivery of UK HE. A common misconception is there is a common pool of international students for UK onshore market and those studying through TNE. In 2022/23, 30% of TNE students were domiciled in China, Sri Lanka & Malaysia whereas key UK onshore markets include India, China & Nigeria. Excluding China, the top 6 key markets of each delivery model are independent, suggesting market cannibalisation risk is low and expansion in tandem is viable.

Closing thoughts

Addressing the initial question, the opportunities outlined above are very promising. However, we expect varied results across UK HE, with a handful of ‘winners’ from TNE. The pioneers of TNE are already seeing return on their resources committed. Only time will tell whether new markets, technological advancements and alternative TNE delivery models enable the late adopters to catch-up. Please do get in touch with us if you would like to discuss anything further.