Branch campuses seem to be the flavor of the month or, perhaps, the decade. Universities, mostly but not exclusively from the developed and mainly English-speaking countries, have established overseas branches worldwide — mainly in developing and emerging economies. The Observatory on Borderless Higher Education counted 162 branch campuses in 2009, with American universities accounting for 48 percent of the total. No doubt the number of branches has increased significantly since then. The Arabian Gulf has received a great deal of global attention since several countries have welcomed — and paid for — branch campuses, as part of their higher education growth strategies. For example, Education City in Doha, Qatar, currently hosts six American universities and one from Britain. Bahrain, the United Arab Emirates, and other Gulf countries have additional branch campuses of foreign universities. Singapore predates the Gulf as a higher education hub.
Given this boom in branches, several fundamental questions need to be raised. What are branch campuses? Are they sustainable over time? What unique service do they render to students and the academic community?
What is a branch?
There is no generally accepted definition. Most observers seem to agree that an "international branch campus" is an entity pertaining to a university whose primary location is in one country, which operates in another and offers its own degree in that country. Upon successful completion of the course program, fully undertaken at the unit abroad, students are awarded a degree from the foreign institution. This definition excludes joint-degree programs, twinning arrangements, overseas campuses serving students from the home university, degree franchising, and other international ventures. In a few cases, branch campuses offer the opportunity for students at the branch to study at the home university for part of their program, and some offer study abroad facilities for students from the home campus.
This simple definition must be considered in a fundamental way. Are the students at the overseas campus receiving essentially the same educational experience as they would experience on the home campus? Is the quality of instruction equivalent? Are the professors from the home campus? Are the facilities broadly equivalent — taking into account that it would be impossible to duplicate New York’s Washington Square campus in Abu Dhabi? In other words, is a student experiencing the same, or close to the same, education as at the home campus? It is not enough to put a university’s name on the degree. The actual quality and at least a semblance of the academic experience and culture at the home campus must be provided for a branch campus to deserve to offer a university’s degree. Anything less "dilutes the brand" and should not be called a branch.
Questions of sustainability
With a few exceptions, branch campuses have been established fairly recently, so that there are few clear lessons to be drawn yet from limited experience. Still, a number of questions concerning sustainability must be asked.
Enrollments.Will branch campuses be able to enroll students of the same quality as their home-campus students over time? A number of problems in this respect are already evident. The University of New South Wales, for example, closed its branch campus in Singapore in 2007, after less than a year — due to low enrollments. Most of the American branches in the Gulf are reportedly under-enrolled. In that region, particularly, it is unclear whether there are a sufficient number of young people with the requisite interests and academic accomplishments to fill the existing branch campuses, not to mention new ones.
Some of the branches see possibilities for enrollment from the Indian subcontinent, with its large population of underserved students. Yet, a recent survey showed that prospective Indian students prefer to study in the United States rather than at an American branch campus in the Gulf or, for that matter, in India itself. They would like the full experience of American culture and, perhaps, the possibility of staying in the United States to work following graduation. However, studying at a branch campus provides neither of these opportunities. Data from China indicate that students are not willing to pay U.S.-level tuition at branch campuses of American universities in China, and they worry about the quality of faculty and programs.
Branch campuses in the Gulf are counting on significant numbers of female students from the region, assuming that many families will not want to have their daughters studying in the West but would prefer a regional institution — although 21 percent of Saudi Arabian students abroad, largely in Western countries, are women. Clearly, the assumptions are faulty. Furthermore, the small population base in the Gulf means that the numbers of students with high academic qualifications are limited. To make matters even more complicated, both the branch campuses and local universities often need to provide up to a year of preparatory study for many students before full admission is possible, due to a combination of inadequate English-language skills and inadequate secondary school preparation. For selective universities, like Carnegie Mellon or New York University, it is highly questionable whether the pool of qualified candidates will be large enough to become sustainable over time.
While hard data are impossible to obtain, some reports have revealed that most branch campuses have not as yet met enrollment targets. Enrollments are hard to predict and depend on many variables, including changing political and social circumstances. It is not clear how the current unrest in the Middle East will impact the branch campuses in the region. As more branch campuses are established in educational hubs worldwide, there will be increased competition among them.
Faculty and staff.A branch campus requires home campus faculty to provide a real academic experience of the sponsoring university. This does not mean a few faculty members just fly in for "intensive" weekend courses. Will branch campuses be able to lure faculty members, for a semester or longer, to an overseas campus? Residential faculty are necessary. Moreover, temporary adjunct faculty located in the region or local residents with doctorates awarded by the main campus of the university will not suffice. Home campus faculty must be willing to teach at the branch for a year or more. Again, the idea of a branch campus is to replicate the academic and other experience of the home university — and home campus faculty members are key actors. Similarly, key administrators and support staff in student affairs and other areas must belong to the home campus to provide the spirit of the home university or at least have experience at the home campus.
Experience shows that it is quite difficult to convince home campus faculty to teach in an overseas branch campus for extended periods of time, even when salary and other benefits are attractive. Yet, even once the small group of internationally minded faculty and staff have volunteered go abroad, convincing others to go is all but impossible. Uprooting working spouses and children is not easy. Research-active faculty — especially in the hard sciences, for whom laboratories at the branch cannot match those at home — will also be reluctant to leave their labs.
Funding. Branch campuses of prestigious universities receive generous start-up funding from host countries, institutions, property developers, or other entities. Typically, little up-front investment is provided by the home university and in some cases, such as the Gulf, hefty subsidies. However, significant nonmonetary expenses include the time spent by a myriad of administrators and faculty for planning, negotiations with host governments and institutions, and other aspects. Developing curriculums, implementing personnel policies, and working with a variety of stakeholders all involve time — and, indirectly, money.
Sustained funding as the branch campus develops is another challenge. Most universities do not want the branch to be a drain on home campus resources, and indeed some institutions expect overseas ventures to earn a profit. For public universities, legal requirements on public funds are an added challenge, given restrictions on spending public funds overseas. Branch campuses may be under considerable pressure to "break even" quickly. Where there are sponsors with deep pockets, as in the Gulf, pressures will be less intense, but the branch campuses will eventually need to be financially sustainable.
While there are few if any data available, it seems that the most financially successful branch campuses are those sponsored by less-prestigious universities and other educational providers, which offer programs that are inexpensive to provide and have a ready interest abroad. Quality standards are often low, and careful attention is given to the bottom line, with little regard for local relevance.
A quality branch campus, even if it is small and specialized, requires careful financial planning in a context, which include many variables that are difficult to measure or predict. The costs of coordination and administration at the home campus, direct instruction, maintaining appropriate enrollment and income levels, and other variables are extraordinarily difficult to forecast.
Worries have been raised about academic freedom at branch campuses. Although key leaders and relevant agreements guarantee academic freedom, many faculty are worried. What happens, some say, if a faculty member at a Dubai branch invites an Israeli speaker, or one in China invites the Dalai Lama or writes an op-ed highly critical of the authorities. How will authorities in countries without a stellar academic freedom record handle the branch campuses?
Home Campus Politics
Branch campus initiatives are typically proposed by top university management and not by the faculty or students. They may be seen as a way of boosting the university’s global image, contributing to internationalization, earning income, or addressing other institutional strategic goals. The larger academic community is seldom involved in either planning or executing the branch campus initiative. Indeed, it is often hard to convince the faculty and students that branch campuses are worth the additional work, risk, and commitments required. Without faculty buy-in, success is difficult. Reports of significant campus grumbling at New York University have been published, and campus opposition was cited as one of the reasons for the failure of Michigan State University’s branch campus in the Gulf.
Most recently, criticism at Yale University concerning that university’s partnership with the National University of Singapore, due to concerns about academic freedom and other issues, has emerged in the media. International ventures have frequently been subject to considerable complaints in Australian universities as well, with members of the academic community criticizing commercial motivations and opposing straying from the university’s core academic mission. Press reports concerning virtually all branch campus initiatives have featured disputes between administrators and segments of the faculty.
Overseas Uncertainties and Changing Policies
The 21st century is the age of globalization. It is also an era of political instability and the transformation of national policies and priorities in many parts of the world. Branch campuses operate in a national context. The current Arab Spring political and social unrest is an example of how drastically and unpredictably political circumstances change. It is impossible to know how the political and social transitions in the Middle East will affect branch campuses in the medium and long run.
The current debate in India — one of the world’s largest potential student markets — about government policies relating to branch campuses and other foreign higher education initiatives is yet another example of how unpredictable this environment can be. The terms and conditions of international involvement will be dramatically altered; and the practical aspects of how these policies will be implemented, in a country famous for opaque regulations, will only emerge over time. Branch campuses are vulnerable to changing and sometimes unstable environments.
Experience shows that at times conflicting expectations of the sponsoring university and the host country or sponsor can result in serious problems. Contractual agreements may be interpreted alternatively — sometimes leading to conflicts among participating parties or even the closure of the branch. A number of these conflicts resulting from differing or interpretations of agreements are, even in this early stage of the branch campus phenomenon, already evident. The problems may be exacerbated when one side — usually the host country — is investing the bulk of the funds.
Obviously, numerous and fundamental problems are facing branch campuses. Even if the basic concept is viable, the risks are substantial. If one accepts the enthusiastic comments and the range of plans and start-ups, there may be a bubble in the making. A necessary episode to recall is that 20 or more American universities rushed to Japan in the 1980s to start branches, but only two survived. Exactly the same kinds of misunderstandings, insufficient advance planning, unrealistic expectations on both sides, and cross-national confusion that can be seen today led to the failure of most of the Japanese ventures.
The lesson — caveat everyone!
Philip G. Altbach
Philip G. Altbach is Monan professor of higher education and director of the Center for International Higher Education, at Boston College.
As universities are increasingly exposed to the rough justice of the market, their institutional life is distinguished more by the rate of change than by the observance of custom and tradition. Few examples illustrate this better than the rush, in recent years, to establish overseas programs and branch campuses. Since September 11, 2001, the pace of offshoring has surged and is being pursued across the entire spectrum of institutions that populate the higher-education landscape -- from the ballooning for-profit sectors and online diploma mills to land-grant universities and the most elite, ivied colleges. No single organization has attained the operational status of a global university, after the model of the global corporation, but it may be only a matter of time before we see the current infants of that species take their first, unaided steps.
The World Trade Organization has been pushing trade-services liberalization for several years, of which higher-educational services are a highly prized component, with an estimated global market of between $40 billion and $50 billion (not much less than the market for financial services).
Opponents of liberalization argue that higher education cannot and should not be subject to the kind of free-trade agreements that have been applied to commercial goods and other services in the global economy. After all, WTO agreements would guarantee foreign service providers the same rights that apply to domestic providers within any national education system while compromising the sovereignty of national regulatory efforts. Yet the evidence shows that, just as corporations did not wait for the WTO to conclude its ministerial rounds before moving their operations offshore, the lack of any international accords has not stopped universities in the leading Anglophone countries from establishing their names and services in a broad range of overseas locations. The formidable projected growth in student enrollment internationally, combined with the expansion of technological capacity and the consolidation of English as a lingua franca, has resulted in a bonanza-style environment for investors in offshore education.
As with any other commodity good or service that is allowed to roam across borders, there has also been much hand-wringing about the potential lack of quality assurance. Critics argue that the caliber of education will surely be jeopardized if the global market for it is deregulated. Much less has been said in this debate about the impact on the working conditions of academics or on the ethical profile and aspirational identity of institutions. How will globalization affect the security and integrity of livelihoods that are closely tied to liberal educational ideals such as meritocratic access, face-to-face learning, and the disinterested pursuit of knowledge? Will these ideals wither away entirely in the entrepreneurial race to compete for a global market share, or will they survive only in one corner of the market, as the elite preserve of those who are able to pay top dollar for such hand-crafted attention?
No slouch when it comes to entrepreneurial conduct, New York University has eagerly sought recognition as a global player. In the course of the 1990s, it established itself as the national pacesetter in sending students abroad. Currently, 25 percent of its vast student body, many of whom refer to their alma mater as Global U, enrolls in one of its eight study-abroad programs -- in London, Paris, Madrid, Berlin, Prague, Florence, Shanghai, and Accra. The administration has mandated this student number to rise to 50 percent by 2011, new programs are being set up in Buenos Aires, Tel Aviv, and an additional one is likely to resume operations soon in Mexico. NYU professors ritually bemoan the quality of offerings in many of the overseas “island” programs (in which students study with other Americans on campuses abroad) or lament that students spend their time abroad in an edu-tourist bubble, cosseted from any authentic contact with a non–American culture or environment.
Much less discussed is the financial reasoning behind these and other NYU offshore operations or the overall logic behind the rapid expansion of the university’s existing global network in recent years. Some of this neglect is due to the lack of fiscal transparency at a private university and to the eroded state of faculty governance over academic affairs. But to approach the topic adequately requires familiarity with the larger picture of how and why American, British, and Australian institutions, in particular, are going global. This essay charts some of the dimensions of that aggregate move, assessing NYU’s profile in a sector that, for all its mercurial growth, is not well documented, let alone widely understood.
Greenwich Village in the Desert?
At some point in the course of the strike by graduate students at NYU, the NYU administration was approached by representatives of the United Arab Emirates with a proposal to set up an NYU branch campus in Abu Dhabi. The campus would be built from scratch with UAE money, and a donation of up to $100 million, according to some estimates, would be made available to NYU on signing the agreement. The degrees would include a full range of liberal-arts subjects and would be on offer, primarily, to UAE nationals. For colleges with prestige names, this kind of offer from the government of a developing country is increasingly common. As long as the source of the offer is not wholly disreputable, the prospect of acquiring an overseas facility at minimal cost and administrative energy is welcomed as an invaluable revenue “opportunity.” The emirates and neighboring Qatar have been especially successful in attracting foreign colleges with such generous offers and are engaged in a bidding war to outdo each other to add cultural cache to their portfolio of corporate brands. The Louvre, Sorbonne, and Guggenheim had all been approached by Abu Dhabi government representatives before NYU was asked to set up a branch campus.
Dubai hosts a complex called Knowledge Village for offshore branch campuses from Pakistani, Russian, Canadian, and Indian universities, in addition to select British, Australian, and American universities, In Qatar, several top-brand American universities, including Carnegie Mellon, Cornell, Georgetown, Texas A&M, and Virginia Commonwealth Universities, are already established in Doha’s 2,500 acre Education City, with all expenses paid for by the royal family’s Qatar Foundation.
Students in the Middle East have every reason to feel they may not be welcome in the United States after 9/11, while the philosophical world-view associated with the War on Terror has provided administrators with an additional set of arguments to justify their newfound presence in the region. Many of their faculty are no doubt persuaded by Thomas Friedman-style reasoning that aspiring Middle Eastern students would be better served by a Western, liberal education than by the curriculum of a glorified madrassah. Yet those with a modicum of knowledge about the region are all too aware that the host countries in question are quasi-feudal monarchies that ruthlessly suppress Islamism, among other belief-systems, and are in no small measure responsible, as a result, for the flourishing of terror in the Middle East and beyond.
So the debate falls along familiar lines, as it did at NYU: Is it better to try to influence the political climate in illiberal societies by fostering collegial zones of free speech, or is the instinct to engage student elites in such societies a naïve or, at worst, colonial instinct? Notwithstanding the politics of any university’s overseas mission, it is not at all easy to distinguish some of the new offshore academic centers from free-trade industrial zones where outsourcing corporations are welcomed with a lavish package of tax holidays, virtually free land, and duty-free privileges. Indeed, in many locations, Western universities are physically setting up shop in free-trade zones.
In Dubai, the foreign universities are basically there to train knowledgeworker recruits in the Free Zone Authority’s other complexes -- Dubai Internet City, Dubai Media City, Dubai Studio City, DubaiTech, and the Dubai Outsource Zone. In Qatar, the colleges share facilities with the global high-tech companies that enjoy tax- and duty-free investments under that country’s free-zone law. Some of China’s largest free-trade locations have begun to attract brand-name colleges to relieve the shortage of skilled labor that is hampering the rate of offshore transfer of jobs and technology. The University of Liverpool, the first to open a branch campus in Suzhou Industrial Park (which attracts more foreign direct investment than any other zone in the People’s Republic of China), advertised entry-level positions at salaries beginning at $750 per month.
By the summer of 2006, the NYU administration had attracted widespread criticism -- reinforced by events surrounding the graduate student strike -- about the chronic lack of faculty consultation in decision making. Consequently, it felt the need to circulate the Abu Dhabi proposal to members of Faculty Senate Council. (A decision the year before to enter into a collaborative venture with the American University in Paris at a new site on the Isle Seguine was reached with minimal faculty consultation.) Even so, the faculty representatives were enjoined by President John Sexton himself not to talk about the proposal beyond the confines of the council and, in particular, not to mention the location of the proposed site. Though he placed a quasi–gag order on faculty senators, President Sexton himself took the liberty of discussing the proposal publicly during conference presentations elsewhere. In the interim, he formed a branch campus committee under the leadership of a friend and outsider, Tom Jackson (a bankruptcy law specialist who had just served 11 years as president of the University of Rochester), to advise on this policy decision. Committees were also formed by the provost and by Faculty Senate Council, and a delegation of faculty and senior administrators was sent to Abu Dhabi to research advanced details of the proposal.
From the outset, faculty input about the Abu Dhabi proposal was highly circumscribed, and, given the administration’s record of non-transparency, few expected that the circle of consultation would be notably widened over time. Some regional specialists with close ties to the administration were invited to serve on the top-level branch-campus committee, but they distanced themselves after learning more details about the planned site. For those few, and for other faculty who ended up accepting the invitation (select faculty senators were sent on a site visit), the primary skepticism about the proposal focused on the limits to academic freedom that might be imposed by the host country. Would slides of nudes be permitted in art history classes? Would queer students be allowed to organize their interests? What if the students ended up espousing radical versions of Islamism? Concerns were also raised about the opportunism of the proposal and about the likely student constituency in a country where a huge service class (up to 80 percent of the effective population) of low-wage, indentured migrant workers caters to the needs of a small citizen elite. There were no firm legal grounds for assuming that the royal sponsor could be wholly trusted to follow through on details of an agreement; nor ultimately was there any guarantee that the venture would not turn into a vast money pit.
On the face of it, the Abu Dhabi proposal put NYU on the threshold of a decision that other colleges had already made about whether to offer degrees abroad to local nationals. Would the reasons to make this move be fully debated in light of the experience of other colleges, and how would such a decision affect the character and resource map of the institution? Open deliberation on this question might help redress the ailing condition of faculty governance. It might also pressure the administration to observe some measure of transparency in policy-decision making. But in practice, NYU had long ago crossed that threshold, and in the larger world of higher education, the distinction between onshore and offshore education -- like that between private and public, or nonprofit and for-profit -- has become very blurry, indeed.
The distinction matters even less when viewed from the perspective of how the export trade in educational services is defined. The WTO, for example, recognizes four categories under this heading. Mode 1 involves arms-length or cross-border supply such as distance learning. Mode 2 is consumption abroad, which is primarily covered by international students’ studying overseas. Mode 3 is commercial presence, or, basically, foreign direct investment in the form of satellite branches of institutions. And Mode 4 is movement of natural persons, such as academics teaching abroad.
Most of the current and foreseeable growth is in Mode 1 and Mode 3, and much of this is assumed to be linked to a perceived decline in Mode 2 growth. Statisticians justify their own trade as well the core principles of free trade by showing how these patterns of ebb and flow are interconnected. In response, and as a general fiscal principle, organizations will try to balance their budgets by pushing expansion in one area to compensate for shortfalls in another. This is how global firms have learned to operate, by assessing and equalizing the relative return on their investments in various parts of the world, both in the world of real revenue and in the more speculative realm of brand building for the future. University accounting departments have begun to juggle their budgets in a similar way. A deep revenue stream from a facility in the Middle East will be viewed as a way to subsidize unprofitable humanities programs at home (as is the case at one Midwestern institution where I inquired) just as an onshore science center capable of capturing U.S. federal grant money may be incubated to help fund an Asian venture considered crucial to brand building in the region.
A Balance of Trade
In the interviews I conducted with faculty and administrators at NYU and elsewhere, a clear pattern of talk about this kind of fiscal juggling emerged (though no hard numbers could be accessed with which to match the rhetoric). NYU’s own global programs are an eclectic mix of ventures, spread across several schools and divisions, each of which has its own fiscal boat to float. When viewed in their entirety, the programs clearly do not hold to any overall rule about the demarcation of onshore from offshore education, let alone any systematic educational philosophy.
Though they lack a coherent profile, they show a clear pattern of exponential growth and expansion onto every continent -- beginning, historically, with the Madrid and Paris study-abroad programs in “Old” Europe -- and into each regional market as it was declared open to foreign direct investment. While its eight study-abroad sites are primarily for NYU students to spend a semester abroad, places are offered to non–NYU students as and when vacancies open up. In addition, as many as 60 summer study-abroad programs are currently offered to non–NYU students in Brazil, Canada, China, Cuba, the Czech Republic, England, France, Germany, Ghana, Greece, Ireland, Italy, Mexico, the Netherlands, Russia, South Africa, Spain, Sweden, and Switzerland. The absence from New York, during the fall and spring semesters, of between a quarter and half of its students allows NYU the option of increasing enrollment at home or reducing the costly expense of providing leased dorm space in downtown Manhattan.
Either option has a huge impact on revenue and seems to be a primary motivation not only for university policy in this area, but also for other colleges to emulate NYU’s successful fiscal example. By 1998, less than a decade after then President Jay Oliva pledged to shape a global university to match Ed Koch’s global-city aspirations for New York itself, NYU had outstripped all other American universities in the volume of students it sent overseas. It also enrolled the highest number of international students. Oliva was known internationally as the founder and host of the League of World Universities, whose rectors met regularly in New York to discuss how to respond to the challenge of globalization, and his successor, Sexton, had made his name by pioneering a Global Law program as dean of the NYU Law School.
In the years since then, NYU has found itself in the forefront of online efforts to offer distance learning abroad (one of which, NYU Online, was a notorious $20 million casualty of the dot.com bust, though its successor has thrived) while each of its schools has been encouraged to make global connections. The Stern business school entered into partnership with the London School of Economics and the Ecole des hautes études commerciales to offer an Executive MBA on a global basis, and the law school set up a Master of Laws (LLM) program in Singapore for Asian students. The scale of the university’s proposed joint venture with the American University in Paris has upped the ante. While it is not likely to involve more than a small minority of NYU students, its growth potential is tied to recruiting well beyond the one thousand international students currently enrolled by the American University.
Most conspicuously, NYU’s School of Continuing and Professional Studies (SCPS), which educates more than 50,000 adult learners annually in more than 125 fields, has become widely known for its provision of services abroad. This has even extended to graduate programs, which it has offered online since 1994, first through the Virtual College and now through NYU Online. The SCPS was one of the first university institutions in the United States to register with the Department of Commerce’s BuyUSA program, described as “an electronic marketplace that connects U.S. exporters with qualified agents, buyers, and partners overseas.” In the words of one of the school’s assistant deans, this program has helped SCPS to locate agents and partners in countries that they “never would have considered otherwise.”
Examples of the school’s penetration in the China market include instructional seminars offered to executives in that country’s publishing industry and a program in real-estate finance designed for brokers and developers active in the People’s Republic of China’s vast construction boom. The SCPS is a hugely profitable arm of NYU, and its instruction is carried by an almost wholly adjunct workforce whose compensation in no way reflects the lucrative revenue harvested by course offerings in such non-orthodox disciplines as Philanthropy and Fundraising, Life Planning, Food and Wine, and Real Estate.
Not surprisingly, the SCPS was one of the first educational institutions in the nation to receive the President’s Export Award for its work in promoting U.S. educational services overseas. In the U.S. trade balance, education is the fifth largest export service, bringing in $12 billion in 2004, and arguably the one with the biggest growth potential. In New Zealand and Australia, among the other leaders in this field of trade, education is the third- and fourth-largest export services. Given the intensification of the global competition for high-skill jobs, educational services are increasingly a number-one commodity in fast-developing countries. The Department of Commerce will help any U.S. university to develop this trade, here or abroad, in much the same way as it helps corporations. For relatively small fees, its Commercial Service will organize booths at international education fairs, find an international partner for one of your university’s ventures, help it with brand recognition in a new market, perform market research, and, through use of the premium Platinum Key Service, offer six months of expertise in setting up an overseas campus and marketing that campus in one of more than eighty countries.
The Race to Deregulate
The U.S. Commerce Department’s activities are fully aligned with the trade liberalization agenda of the WTO, where higher education falls under the General Agreement on Trade and Services. Dedicated, like all WTO agencies, to the principle that free trade is the best guarantee of best quality at lowest cost, GATS was formed in 1995, and higher-education services were added to its jurisdiction largely as a result of pressure in 2000 from the U.S. representative to the WTO, backed by representatives from Australia, New Zealand, and Japan. This inclusion has been fiercely opposed by most higher-education leaders in WTO member nations, most prominently by a 2001 Joint Declaration of four large academic organizations in North America and Europe and the 2002 Porto Alegre Declaration, signed by Iberian and Latin American associations.
The signatories of these two declarations agree that trade liberalization risks weakening governments’ commitment to and investment in public higher education, that education is not a commodity but a basic human right, and that its reliance on public mandates should make it distinct from other services. Yet the concerted opposition of these professional bodies has made little difference to the 45 countries (the European Union counts as one) that had already made commitments to the education sector by January 2006. Indeed, if the Doha Round of WTO negotiations had not been log-jammed by acrimonious disagreements over agricultural trade, GATS would have concluded its work some time ago, imposing severe constraints on individual government’s rights to regulate education within their borders.
Such constraints are particularly debilitating to developing countries that will lose valuable domestic regulatory protection from the predatory advances of service providers from rich nations. Indeed, a new ministerial mandate at GATS allows “demandeurs” such as the United States, New Zealand, and Australia to band together to put plurilateral pressure on the poorer target countries to accept their education exports (demandeur governments are those doing the asking under the WTO’s request–offer process).
Officially, GATS is supposed to exclude services “supplied in the exercise of governmental authority” -- that is, by nonprofit educational organizations -- but most nations that are committed have chosen not to clarify the distinction between nonprofit and for-profit. With good reason we can expect creeping, if not galloping, liberalization in all sectors if the GATS trade regime proceeds. After all, the free-trade culture of the WTO is one in which public services are automatically seen as unfair government monopolies and should be turned over to private for-profit providers whenever possible, all in the name of “full market access.” From the standpoint of teaching labor, this tendency points in the direction of increasing precarity, an interim environment of job insecurity, deprofessionalization, and ever eroding faculty governance in institutions stripped of their public-service obligations and respect for academic freedom.
Even in the absence of any such formal trade regime, we have seen the clear impact of market liberalization at all levels of higher education; the voluntary introduction of revenue-center management models in which every departmental unit has to prove itself as a profit center; the centralization of power upward into managerial bureaucracies; the near-abdication of peer-review assessment in research units that are in bed with industry; the casualization of the majority of the academic workforce, for whom basic professional tenets such as academic freedom are little more than a mirage in a desert; and a widening gap between the salaries of presidents and the pittance paid to contingent teachers, which is more and more in line with the spectrum of compensation observed in publicly listed corporations. None of this has occurred as a result of an imposition of formal requirements. Imagine, then, the consequences of a WTO trade regime that legally insists that regulatory standards affecting procedures of accreditation, licensing, and qualification might pose barriers to free trade in services.
By the time that GATS negotiations over education were initiated in 2000, the range of educational organizations that had established themselves overseas was already voluminous. These organizations included (1) corporate spin-offs that do employee training and offer degrees such as Motorola University, McDonald’s Hamburger University, Microsoft’s Certified Technical Education Centers, General Electric’s Crotonville Colleges, Fordstar’s programs, and Sun Microsystems’ Educational Centers; (2) private for-profit education providers such as the mammoth Laureate Education group (which now owns higher education institutions all over South America and Europe, operates in more than 20 countries, and teaches a quarter-million students), the Apollo Group, Kaplan Inc., and DeVry; (3) virtual universities such as Walden University and Western Governors University in the United States, the Learning Agency of Australia, India’s Indira Gandhi National Open University, and the United Kingdom’s Open University; (4) traditional universities that offer distance learning, especially in countries such as Australia and New Zealand, where governments mandated the marketization of higher-education services; and (5) for-profit arms of traditional universities such as NYU’s SCPS, the University of Maryland’s University College, and eCornell.
In the years since then, the volume and scope of overseas ventures has expanded to almost every institution that has found itself in a revenue squeeze, whether from reduced state and federal support or from skyrocketing expenses. As a result of market-oriented reforms in higher education, every one of Australia’s public universities is aggressively involved in offshore education in Asia, creating a whole class of educational entrepreneurs, onshore and offshore, whose pursuit of monetary gain has inspired repeated calls for audits. Since many of these programs carry large fiscal risks, the tendency increasingly is to favor conservative models such as franchising or producing syllabi in Australia to be taught entirely by local instructors offshore.
There is not even a pretense of academic exchange involved in this arrangement, in which education is little different from a manufacturing product designed at home, produced and assembled by cheaper labor abroad, and sold to consumers in emerging markets. In the U.S. for-profit sector, entrepreneurs scrambling to meet overseas demand for degrees (“with no frills”) that have an unambiguous market value are taking advantage of notoriously loose accrediting procedures to set up shop and pitch their products. Lax regulation in some Southern and Western states and in offshore diploma-mill havens such as St. Kitts, Liberia, and the infamous Seborga, a small self-proclaimed principality in Italy that has granted accreditation to dozens of dubious degree-granting entities, make it easy to license operators who open and close programs overnight to suit market demand.
Most recently, the widespread practice of outsourcing study-abroad education to for-profit intermediaries has attracted investigative scrutiny. In August 2007, New York Attorney General Andrew Cuomo’s probe into the student loan kickback scandal was expanded to assess evidence that universities had received perks from companies that operated their study-abroad programs. These included “free and subsidized travel overseas for officials, back-office services to defray operating expenses, stipends to market the programs to students, unpaid membership on advisory councils and boards, and even cash bonuses and commissions on student-paid fees.” The investigations began to uncover patterns of corruption endemic to the economy of subcontracting and offshore outsourcing. With China’s economy leapfrogging up the technology curve, the jumbo demand for high-value, professional–managerial talent there has sparked a gold rush, with foreign universities scrambling to meet a need that the state (whose professed priority is to fund basic rural education) cannot.
There are few U.S. colleges that have not sent prospecting missions to China to scout out offshore opportunities in the past few years. As for their return on investment, many administrators come back from these trips pondering the lesson that foreign companies learned: It is not at all easy to make money in China, let alone break even, and least of all from a joint venture with a Chinese partner, which is the obligatory arrangement for most colleges. Even in the absence of guaranteed revenue, many will set up shop for the same reason that corporations have persevered there: to build their brand in the China market or establish their name in the region in anticipation of a future windfall.
If universities were to closely follow the corporate offshoring model, what would we expect to see next? In a labor-intensive industry (a characteristic that education shares with the garment industry; 75 percent of education costs go to teaching labor), the instructional budget is where your employer will seek to minimize costs first, usually by introducing distance learning or by hiring local, offshore instructors at large salary discounts. Expatriate employees, employed to set up an offshore facility and train locals, will be a fiscal liability to be offloaded at the first opportunity. If your satellite campus is located in the same industrial park as Fortune 500 firms, then it will almost certainly be invited to produce customized research for these companies, again at discount prices.
It will only be a matter of time before an administrator decides it will be cost-effective to move some domestic research operations to the overseas branch to save money. And once the local instructors have proved themselves over there, they may be the ones asked to produce the syllabi for and, ultimately, teach remote programs for onshore students in the United States. Inevitably, in a university with global operations, administrators who have to make decisions about where to allocate budgets will favor locations where the return on investment is relatively higher. Why build expensive additions at home when a foreign government or free-trade–zone authority is offering you free land and infrastructure? Why bother recruiting overseas students when they can be taught more profitably in their countries of origin? If a costly program can only be saved by outsourcing its teaching, then surely that is the decision that will be made. And so on.
But is this the way it has to be? For all the zealous efforts to steer higher education into the rapids of enterprise culture, it would not be hard to demonstrate that, with the exception of the burgeoning for-profit sector, most universities for the most part do not and cannot function fiscally like a traditional marketplace and that the principles of collaboration and sharing that sustain teaching, learning, and research are inimical or irreducible in the long run to financialization after the model of the global corporation. Yet one could say much the same about the organizational culture of the knowledge industries. High-tech firms depend increasingly on internationally available knowledge in specialized fields; they collaborate with one another on research that is either too expensive or too multisided to undertake individually, and they depend, through high turnover, on a pool of top engineers to circulate brainpower throughout the industry.
So, too, the management of knowledge workers has diverged appreciably from the traditions of Taylorism and is increasingly modeled after the work mentality of the modern academic, whose job is not bounded by the physical workplace or by a set period of hours clocked there. Modern knowledge workers no longer know when they are on or off the job, and their ideas -- the stock-in-trade of their industrial livelihoods -- come to them at any waking moment of their day, often in their most surveillance-free moments. From this perspective, talk about the “corporate university” is lazy shorthand. The migration of our own academic customs and work mentalities onto corporate campuses and into knowledge industry workplaces is just as important a part of the story of the rise of knowledge capitalism as the importation of business rationality into the academy, but the traffic in the other direction is all too often neglected because of our own siege mentality.
In all likelihood, we are living through the formative stages of a mode of production marked by a quasi-convergence of the academy and the knowledge corporation. Neither is what it used to be; both are mutating into new species that share and trade many characteristics. These changes are part and parcel of the economic environment in which they function, where, on one side, a public commons unobtrusively segues into a marketplace of ideas, and a career secured by stable professional norms morphs into a contract-driven livelihood hedged by entrepreneurial risks, and on the other side, the busy hustle for a lucrative patent or a copyright gets dressed up as a protection for creative workers, and the restless hunt for emerging markets masquerades as a quest for further international exchange or democratization.
It may be all too easy for us to conclude that the global university, as it takes shape, will emulate some of the conduct of multinational corporations. It is much more of a challenge to grasp the consequences of the co-evolution of knowledge-based firms and academic institutions. Yet understanding the latter may be more important if we are to imagine and build practical educational alternatives in a civilization that feeds on mental labor to enrich its economic lifeblood.