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International Students and Business Education: Whither or Wither?

Certain shifts in international study were occurring pre-pandemic, but with new restrictions to mobility and campus attendance, how will its future fare?

The prognosis for future international student flows in higher education is complex. COVID-19 has caused major disruption to this segment of learners, and the conundrum business educators face is whether enrollments will decline or concentrate in new destinations—or both. To paraphrase Indian entrepreneur Manish Sabharwal, resolving complexity is “not the solving of a sum, but the painting of a picture.” Predicting the future of international student flows, therefore, requires analysis of the pre-COVID-19 patterns and trends, the impact of and response to COVID-19, and the key factors influencing activity post-pandemic.

Pre-COVID Trends

In 2019, 5 million students were studying at the tertiary level internationally, up from 2 million in 2000. These students are particularly important for university enrollments, with Organisation for Economic Co-operation and Development (OECD) data for 2017 showing that the students made up 22 percent of tertiary learners in Australia, 20 percent in New Zealand, 18 percent in Britain, 9 percent in the 23 European Union member countries of the OECD, and just over 5 percent in the U.S. The main sources of students were China, India, and Middle Eastern countries. These statistics are particularly pertinent for business schools, as business was the main subject for which these learners went to international universities to study.

Despite the strong growth in international student flows over these years, developments before the pandemic had already started to disrupt movement and create new nodes of attraction for students. Notably, Asian business schools had gained greater interest among applicants, as their quality and global ranking had increased markedly over the last 20 years.

For example, in 1999, the Financial Times Global MBA rankings did not feature any Asian business schools. This year, 12 of the top 50 schools in the FT rankings are from Asian countries or territories (China, Hong Kong, India, and Singapore). China’s Project 985 and double first-class initiative, India’s Institutions of Eminence initiative, and Malaysia’s Education Blueprint 2015-2025 (Higher Education), all through clear direction and appropriate resource support, are focused on creating high-quality international universities and schools.

The quality of business schools in Asia Pacific is further evidenced by the 147 AACSB-accredited schools now in the region, reflecting the strong quality enhancement journey that many schools have undertaken. By comparison, in 1997 there were no AACSB-accredited schools in Asia Pacific.

Well-known universities have also established branch campuses in major source countries, further altering the international student landscape. U.S. examples of this include Georgetown University, Cornell University, and Northwestern University in Doha; New York University in Abu Dahbi and Shanghai; Yale University in Singapore; and Duke University in Beijing.

British universities, too, have contributed to the global spread, with Manchester Business School in Singapore, UCL (University College London) in Doha, and Nottingham University in cities in China and Malaysia. Also notable is the joint European Union-China initiative with CEIBS in Shanghai and INSEAD’s campus expansion to Singapore. Further, many Australian business schools have a presence in parts of East Asia, either via a campus or through partnerships.

Further influences on student flows have been visa restrictions, notably in the U.S., where in the first year of the Trump administration Indian visas approved for tertiary study fell by 30 percent, according to Parag Khanna, author of The Future Is Asian: Global Order in the Twenty-First Century.

These developments have created opportunities for higher-quality education in the Asian region and act as a counter-attraction to traditional destination markets.

COVID Impacts and Responses

COVID-19 has had a marked impact on international student flows. Universities in Australia and New Zealand, for instance, have been strongly affected, as students admitted for the 2020 academic year, starting in March, were not able to come to these countries. The budget effect has been severe, as international student fees range from two and a half to six times those of domestic students. As foreign students stayed home, along with their tuition fees, universities in the regions felt significant losses, with Sydney University, UNSW, and Monash University, among others, announcing staff cuts as a result.

With the academic year commencing shortly in the Northern hemisphere, similar impacts are expected in some countries. Hong Kong is noticing a significant decrease, and in the U.K. one estimate projects a tuition revenue fall by 2.8 billion GBP (more than 3.5 billion USD) annually. The London School of Economics alone could lose up to a staggering 66 percent of tuition fees, according to another forecast, due to its strong brand as an international education destination and its resulting dependence on foreign students.

Elsewhere in Europe, while there is an expected falloff in the number of international students at many higher education institutions, the financial impact will be less, as tuition fees are relatively lower. In the U.S., only 5.8 percent of students are from abroad, according to OECD data, so the overall effect of the enrollment decline will be less significant. But for some universities and schools that depend on international students, the effect will be severe.

COVID-Fueled Innovations

Universities have responded to this significant downturn in innovative ways. Business schools ubiquitously have addressed pedagogical impacts by moving to online course delivery. Across the sector universities and business schools have increased their engagement with international students faced with online learning. Examples include the establishment of chat groups for students, proactive connection by business schools with students to check both on their well-being and academic progress, and provision of people resources for students to connect with should they need some human contact.

In Britain, several universities are planning to charter planes to bring in international students and provide quarantine processes for them. In New Zealand and Australia, universities are lobbying governments to make an exception to travel restrictions for international students and are working on plans for quarantine, should they be successful.

Universities in Hong Kong and Malaysia have initiatives in place to retain local students who would normally go overseas. For example, Hong Kong University has established a Visiting Student Scheme to accommodate local students who have been accepted overseas but cannot go. India Amity University and IFIM Business School are each allowing students to complete their first year of their study at their Indian campus, with delivery options from offshore or locally, before heading overseas for their second year of study.

The Future of International Study

Pulling together pre-pandemic trends with effects of the crisis we are currently seeing, what can we predict about the future of international student flows? Our answer must be informed by the four key factors that students consider when making decisions about their educational paths: quality, safety, geopolitical factors, and cost.

The quality of a business school and its programs is a key determinant of a student’s decision to study at a given institution. Thus, many of the traditional universities and business schools around the world will remain attractive. However, it is pertinent to note the growth of quality business schools, particularly in Asia, that are gaining interest and are likely to both keep domestic students at home as well as attract students from outside the region.

Safety has become more of a concern since the onset of COVID-19. This concern will see students favoring East Asia, New Zealand, and Australia, where the response to the pandemic has been swift and effective, followed by Europe, where many of its regions have subsequently become effective.

Geopolitical influences create uncertainty for student flows. For example, Canada’s publicly expressed concerns about some Saudi Arabia internal judicial decisions in late 2018 led to the country’s cancellation of Saudi scholarships supporting tertiary study in Canada. The deteriorating trade situation between the U.S. and China is also having a detrimental impact on flows of student to the U.S., and recently, Australia’s response to national security regulation in Hong Kong is not helpful for its inflow of Chinese students.

Cost remains an important consideration for learners everywhere. In this regard, Europe, East and South East Asia have an advantage because of their lower fees, compared to those in the U.S., the U.K., and Oceania. Further, schools in East and South East Asia are advantaged by their close proximity to the source countries of many international students, leading to lower transportation and living costs than those of many traditional destination countries.

So, whither or wither international students? The answer is yet obscured by countervailing forces at work. Depending on which factors predominate, the outcome could be decreased flows, and/or a very different-looking distribution from pre-COVID times.


Geoff PerryGeoff Perry is the executive vice president and chief officer of Asia Pacific and is based in the Singapore office.