Policy review

POLICY REVIEW 1:

Offshore education: Finland’s way into China?

In the opening speech of “Talent Available” Event on September 5, 2013, Prime Minister Jyrki Katainen stated the great potential of joint venture in higher education for the Finnish higher institutions to enter China’s education market. He believes that it is a strategically valid option to enter the market, and to leverage the presence of Finnish industries in China and vice versa.

So how is it possible to execute joint ventures with the Chinese partners? Let us take a look at the issue from two perspectives, Chinese and Finnish, respectively.

From the Chinese perspective

Through one decade of modifications, the Chinese government has recently posed a favourable position towards the Chinese and foreign cooperatively-run schools.  The Chinese domestic policies which are represented by and formed around the Regulations on Chinese-foreign Cooperation in Running Schools (CFCRS) encourage Chinese education institutions to conduct cooperation in running schools in fields of emerging demand and urgently needed. The underlined interests that cooperatively-run schools can bring to China lie in three dimensions of demands.

• Meeting the exceeding demand in higher education

Firstly, it is believed that off-shore education in China compensate the limited education resources in China. The gap between the provision of higher education in China and the demand for higher education exists continuously. Even though both the Chinese public and the private sectors have been pouring huge investments into building higher education institutions, China still cannot keep up with the burgeoning demand for higher education. Moreover, increasingly, since late 1970s, the Chinese government has encouraged numerous students to pursue their studies abroad though favourable policies. Therefore, due to these “push” factors, studying abroad has become a huge trend in the country. According to some studies, from year 1978 to 2007, a total of 1.27 million Chinese students and scholars studied in 110 countries and regions all over the world, and in almost all disciplines.

However, new studies have shown compared to sending students abroad, the foreign-sourced, in-country provision of higher education is more cost-effective in terms of reducing travel and living costs for students and their families. In response to that, Regulations on (CFCRS) explicitly confirms the significance of establishing cooperatively-run schools. As it stated, the action is of “beneficial to the public interests and” it “forms a component of China’s education cause”.

• Improving the quality of the skilled labour

Secondly, the boosting economy in China demands upgraded workforce to help the nation to integrate into the global market.  Among many other things, the CFCRS has been perceived as an important means to improve the quality of skilled human capital and also as a means to boost the country’s economy. Long noticed by some authors in 1990s, despite the fact that the education system in China provides substantial and diversified vocational training and technical education, the demand for certain professions, such as skilled technicians and managers, exceeds the supply.

• Increasing international competitiveness of the Chinese higher education

Thirdly, with the growing trend of globalisation, the Chinese higher education wishes to increase its competitiveness globally through internationalisation. An investigation conducted to determine the drives for Chinese higher institutions to form alliances with foreign universities reveals that there are three main reasons why they are doing so. First, as aforementioned, the government has issued favourable policies, because foreign-Chinese university alliances ensure wider range of courses and programme choices, from which the more skilled workforce could speed up the economic development in China. Second, through building a portfolio of foreign partners, the Chinese universities would likely gain images, statuses and competitive positions domestically and internationally. Third the Chinese universities would naturally be part of the global academic community once they form alliances with the foreign universities.

From the Finnish perspective

Internationalisation has been lying in the core of Finland’s national strategy. In 2009, the Ministry of Education and Culture in Finland implicitly indicated that internationalisation of higher education can be considered as a way to internationalise the entire society and to create new networks and business opportunities. Under the free education system, the international students are believed to bring in vitality to boost the Finnish economy. However, with this upcoming reform, Finland may lose this ultimate competitive advantage in attracting the international students.

Nevertheless, the free system has its own limitations. For instance, the higher institutions have restricted intake of the international students due to the limited financial capacity, and they lack the incentives to develop competitive international programmes. The marketisation of higher education in Finland is expected to be the solution to all the problems. By charging tuition fees, the Finnish higher institutions wish to increase their capacities of accommodating the international students. Moreover, by adopting the market approach, it is expected to highlight the links between the higher education and industry, and so they would mutually promote themselves and grow together globally.

In spite of an emerging desire to commoditise international education in Finland, it is worth noting that exporting education tend s to be a privilege of English-speaking countries due to the importance of English language in career success. Moreover, if we take a look at Canada where a similar shift in the international education took place 20 years ago, we would notice a crying out for preserving and fostering the importance the humanitarian and cultural aspects of the international educational activities. Therefore, if Finland commoditises the student recruitment in a radical way, it may have to go through a tough path like its Nordic neighbours. Sweden and Denmark have been faced immediate drop in the number of international students after starting charging tuition fees, and the number still has not been fully recovered.

Finnish Ministry of Education has well acknowledged the disadvantages the international education in Finland is faced with. To quote it, “the Finnish higher education institutions have been left out of fast-growing educational markets”, and “the export and professional marketing of competence are still in their infancy.” As Organisation for Economic Co-operation and Development (OECD) summarised in 2009, a traditional perception of Finland has been that 1) it is far from important economic and industrial centres, 2) it tend to be expensive, 3) it has a climate which may deter international students or immigrants, and 4) it has a difficult language. All these factors have constrained and will continue to constrain the development of international higher education in Finnish higher education institutions. Therefore, the international higher education could hardly become an engine for direct growth in economy.

However, the objective of revenue generating can be achieved if Finnish higher education institutions shift their attentions to the offshore (or cross-border education). Offshore education is becoming a for-profit activity. Australia is a striking example of the provider of offshore higher education in the students’ home country. This activity has largely broadened the higher institutions’ revenues and expanded their international profiles. Between 1996 and 2006, the “offshore” enrolments increased from 18% to 30% of all international students enrolled in Australian institutions, and it is forecasted that by 2025 the figure will reach to 47%[1].

Organising educational programmes, establishing joint venture schools seem to be a valid alternative to the recruitment of the international students inside Finland. Other countries’ experience has proved it as an effective way to attract international students, particularly in the developing countries. This way of operation has been promoted by OECD, “it involves lower personnel costs than studying abroad and can lead to beneficial spillovers in the receiving country’s higher education.”

While more and more Finnish enterprises have established their businesses abroad, they need increasing number of competent local employees who master both the technologies and skills required by the work and the Finnish and local cultures. The involvement of offshore higher education provided by the Finnish higher education institutions can facilitate the training of the local labour force in order to align the needs of Finnish companies.

In conclusion, offshore education seems to meet all the needs that China and Finland have posted. However, to implement this solution, the devil is in detail.

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