From crisis to resilience: Rethinking the shape of internationalisation in Australian universities

In my 25+ years working at all levels in the higher education sector, I cannot recall a time when Australian universities were being squeezed simultaneously by so many critical issues. In addition to the day-to-day complexities of keeping their large, complex institutions moving forward on their teaching, research, and engagement agendas, VCs and their senior teams are grappling with the Universities Accord, navigating a tense geo-political climate on multiple fronts, integrating disruptive AI technologies into their teaching, learning, assessment, and research activities, widening participation, diversifying their domestic cohorts, and planning to help Australia meet its skills and workforce needs by doubling the number of domestic student places between now and 2050. With the introduction of the Australian Tertiary Education Commission, universities will also operate in a more demanding and complex regulatory and quality environment; all as the sector emerges from the financial effects of Australia’s locked-border response to the COVID-19 pandemic. Although university chancellors are sometimes required to defend the large salaries paid to VCs and other senior staff (as they do from time-to-time), I, frankly, think our university executives deserve every penny they earn!

Until now, our higher education sector has been a true success story in our nation’s history, and something of which all Australians should be proud. For a population of approximately 26 million people, our measures of research success punch well above their weight globally, our degrees are highly valued in most parts of the world, our cities and regional centres are relatively safe, and aside from the few errant comments made by the previous Prime Minister during the early stages of the pandemic, we have, by-and-large, been seen as a welcoming study destination. In 2024, it is predicted that our universities will employ 130,000 people in academic and professional roles, and a further 260,000 through allied business. The sector contributes many billions of dollars annually to the Australian economy.

The internationalisation of our universities has been a critical component to the sector’s success. Conservative estimates indicate that international students contributed more than AUD$48 billion to the Australian economy in 2023 and supported more than 250,000 jobs nationally. It is well-documented that international students work in roles that are sometimes difficult to fill, they add an intangible richness to campus life, and strengthen our soft diplomatic global ties once they return to their home countries to fulfil high-level roles. It is also well known that revenue from international student fees supports our research (and teaching) endeavours that are relatively underfunded based on the proportion of GDP spend on research, compared to other OECD countries. In short – the internationalisation of our universities has been, and is, a very good thing!

A noted problem of the approach by Australian universities to international student recruitment, however, is that many of our institutions are over-exposed to limited markets, most notably China, and our approach has, predominantly, been driven by an inbound, on-shore, recruitment mentality. The limitations of these two factors were driven home during the first two years of the pandemic when our borders were closed. At that time, universities were quick to downcast their budgets and shed many jobs in anticipation of a financial doomsday scenario that was avoided when our borders reopened and international students came flooding back. The critical issue here is that despite the dire financial predictions brought about by the pandemic, our universities returned to a business-as-usual mindset. Many metropolitan institutions, in our biggest capital cities, particularly the Go8, have gone back to the ‘well’, and are recruiting large numbers of Chinese students to their onshore campuses. This approach is both puzzling and disappointing, in equal parts, given the potential financial scenario that could have resulted from the pandemic (and could happen again), and the gains in online teaching capabilities that arose out of necessity at the time.

A lot has changed over the past four years and now the sector is, once again, under fire. This time, however, the enemy is not a global health crisis or an aggressive foreign government keen to take a larger share of the international student market; it is our own Commonwealth Government, that was widely welcomed by the sector when it took power some 28 months ago. Australia is experiencing a housing crisis that is all too real and many people are unable to find accommodation because of sky-high rental prices. Unfortunately, despite making up just 4% of the domestic housing rental market, international students have taken the brunt of blame for the local housing crisis that existed when our borders were closed and students were studying in their home countries. In a political move to win votes, the Australian government has decided to restrict the number of international students coming to our shores to study, the price of a non-refundable visa application has more than doubled, and universities have had caps placed on the number of on-shore, full-degree, international students they will be able to enrol. Universities with a lower proportion of international students will have room to grow to reach their 2025 cap, whereas the largest universities in our capital cities (most notably the GO8) must reduce, considerably, the number of places they offer.

Unlike the UK, where education is a highly valued endeavour, in Australia far fewer votes would be lost on legislative changes related to universities. Australian voters seem less interested in understanding the vital role which our universities play in skilling the current and next generation of workers, social mobility, research and development, and more broadly in maintaining and enhancing our standard of living. Education is Australia’s fourth largest export industry and the financial knock-on effect of these legislative changes cannot be lost on the government. However, despite the best efforts of the Universities Australia collective, the sector’s makeup, by necessity, has created a fractured voice represented by separate interest groups – the Go8, the Regional Universities Network, the Technology Network, and private universities group – each with their own agenda. A collective response by Australia’s universities to the proposed visa changes has therefore been somewhat easily batted away by an incumbent administration keen win over voters on the hot topic of housing, ahead of a 2025 election.

Immigration changes have already affected international students’ decision making; a recent IDP survey confirmed that potential students who once considered Australia as their preferred study destination are now considering alternative receiving countries. The Australian Government’s visa processing changes and student caps will have a profound effect on both university finances and the perception of Australia as a welcoming country. Even if the government was to immediately reverse its position on immigration, the damage to our reputation has begun, and this time, without having a pandemic to hide behind, it may take years to recover. Australian institutions are at a fork in the road; they must now either downcast their research aspirations and budgets, and shed courses and staff, or seek alternative revenue sources. Those well-paid leaders that stick their head in the sand and do nothing “until this blows over” may face an existential threat to their institutions. Some universities will have the necessary cash resources to weather the storm – others may not. The previous conservative UK Government was resolute in its position of not bailing out a university under financial distress – the position of the current Australian Government on university bailouts is not yet clear.

Those universities that pursue alternative revenue sources must now change their approach to internationalisation, to genuinely diversify their source markets, and take our amazing higher education brand to the world, rather than wait for the world to come to us. To use an analogy, in circa. 1900 the Coca-Cola Company took their product to the world and thrived – I wonder what its trajectory would have been had it only sold Coke to those with sufficient funds to visit Atlanta. Australia’s Draft International Education and Skills Strategic Framework lends its voice to the diversification agenda, and to transnational education (TNE) as an adjunct to support internationalisation activities. Australian universities’ appetite for risk can be described as ‘conservative’ (at best) and our willingness to embrace TNE is limited, at least compared to our UK cousins. After all, UK universities have been ‘doing’ TNE for longer and are less concerned about ‘failing fast’ on an unsuccessful venture and moving on.

There’s a lot more to a successful TNE program than operating an expensive off-shore branch campus (or two). A successful TNE program is diversified and can include many traditional, low-risk activities such as pathway partnerships and twinning, it should also leverage gains in online teaching that emerged in response to the pandemic, and incorporate innovative models (e.g., MicroHubs and campus-on-campus) that are being developed all the time. I am not suggesting for a moment that a few successful TNE ventures are easy, a quick fix, or that they will replace the volume of revenue lost from caps on on-shore international students. Rather, TNE partnerships and ventures take time to establish and not all are successful – sometimes you have to ‘kiss a few frogs’ before you find the prince (or princess). Australian universities must also accept that the revenue generated by TNE will not replace lost on-shore revenue on a dollar-for-dollar, student-for-student basis. Successful TNE professionals accept that local pricing applies, and the per-student margin to cohort volume ratio is a relationship that must be understood, accepted, and agreed at an institutional level. TNE should form part of a well-rounded, diversified, internationalisation portfolio that protects our incredible universities from the existential threat of events and decisions that occur outside of their control.