Smith Brain Trust / November 22, 2017

Business Solutions to Grow Global Learning

Business Solutions to Grow Global Learning

How To Address a Troublesome Trend in Higher Ed

By Rebecca L. Bellinger

SMITH BRAIN TRUST – Recently, the 2017 Open Doors Report was released by the Institute of International Education. It is recognized as the preeminent benchmarking tool used to track the number of international students enrolled in U.S. universities and colleges and the number of U.S. students who study abroad each year.

This year’s data were startling. The upward trend in international student first-time enrollment has reversed, declining by 3 percent in fall of 2016, from the year earlier. Initial data for fall 2017 projects a further decline of 7 percent. These drops are significant. By contrast, U.S. universities have retained international students at a 3 percent higher rate than previously. And the number of U.S. students who study abroad also increased by 4 percent.  

For the U.S. economy, this means a few things.

First, the U.S. workforce is poised to benefit from the global competencies and skills that U.S. study abroad students will bring into the workplace. Companies will benefit from the students’ increased capacity for cross-cultural understanding, knowledge of global markets, and tolerance for ambiguity, among other skills.  In a globalized economy, more global competence in the workforce will pay off in an increase in U.S. global competitiveness, which will in turn grow the U.S. economy.

Second, according to NAFSA’s International Student Economic Value Tool, international students contributed $37 billion and 450,000 jobs to the U.S. economy last year. Maryland, for example, hosted more than 19,000 international students in both first-time and continuous enrollment, and over 8,000 jobs were supported by the presence of these students.

This is the good news.

However, as first-time enrollments decline, totals will soon catch up. And that means that the U.S. economy is on track to shrink in the higher education and associated sectors. It’s not just university revenue that’s at stake. International students pay rent and purchase clothing, groceries, cars, and other consumer products. They dine out at restaurants, attend movies and sporting events, and ride public transportation.  A simple calculation shows that in a few years, the U.S. economy could experience a loss of approximately 31,500 jobs and $2.6 billion, figures that correspond with the 7 percent decrease in first-time enrollments.

How would a corporate entity respond to this projected loss in revenue and jobs? U.S. universities and colleges would do well to turn to business principles that guide companies to solve the problems associated with decreased demand.

Diversify the client base: Recruit international students from diverse markets to control for economic downturns and other threats in any specific region or country. Capitalize on new interest from previously untapped markets. Open Doors shows that the number of students coming from Nepal increased by 20 percent.  Bangladesh and India also showed increases of 10 percent each. All of these could be new markets to explore.

Prioritize long-term over short-term (and short-lived) gains: Develop multidimensional partnerships with universities that include faculty collaboration, dual degree programs, student exchange and so on. While startup costs and time to delivery will be longer, partnerships often yield the most consistent long-term payoffs and distribute both the workload and risks among partners.

Invest in initiatives that have high ROI and reduce recruiting costs: Traveling abroad for marketing and recruitment can come with high costs and few returns.  Partnering with alumni, local American Chambers of Commerce and resources like EducationUSA that maintain networks of prospective students abroad, and utilizing social media, electronic marketing, and other online tools for recruitment are potential lower-cost initiatives.

Diversify the product line: Recruit international students into online degree programs, as the value of credentials from the United States can be obtained without the perceived challenges and costs of being in the United States. And degree programs are not the only product of interest to international students. Certificate programs, short-term hosted programs, and one-semester direct enrollment programs have a market, too.

Finally, universities should seek to better understand the declines they are seeing on their own campuses.  Most experts attribute the nationwide situation to any combination of factors. These include competition for international students from universities in the U.K., Australia, and Canada; perceived concerns over personal safety of international students in the United States; uncertainties about permissions to enter the United States surrounding executive orders on travel restrictions; and/or economic downturns in specific economies around the world. But businesses know that external factors affect different businesses in different ways. Customized solutions that take into account these suggestions will be the best approach.

Rebecca L. Bellinger is Managing Director of the Center for Global Business, which is a recipient of a Title VI grant from the U.S. Department of Education known as CIBER (Center for International Business Education and Research). 



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