Could building campuses offshore be the future for Australia's universities?

University of Wollongong in Dubai enrolments have surged by 41 per cent in the past five years.  Photo: Supplied
University of Wollongong in Dubai enrolments have surged by 41 per cent in the past five years. Photo: Supplied
Students at University of Wollongong in Dubai, which is billed as one of the United Arab Emirates' oldest and most prestigious universities.  Photo: Supplied

Students at University of Wollongong in Dubai, which is billed as one of the United Arab Emirates' oldest and most prestigious universities. Photo: Supplied

 More than half of the study at the university's overseas study at overseas locations.
 Photo: Andy Zakeli

More than half of the study at the university's overseas study at overseas locations. Photo: Andy Zakeli

At Wollongong University's booming Dubai campus, thousands of students from scores of countries are studying – in English – for undergraduate and postgraduate degrees in business, finance, IT, engineering and media. Operating as an accredited university for just 16 years, UOWD is billed as one of the United Arab Emirates' "oldest and most prestigious universities" – a small sign of the pace of change in the area of transnational education – and of the market value of an Australian degree.

Wollongong has more than 11,000 international students, and more than half of them study at the university's overseas locations, in the UAE, Singapore, Hong Kong and Malaysia. Fees are about the same as international students pay in Wollongong.

Over the past five years, Wollongong Dubai's enrolments have surged by 41 per cent.

It's the flipside of Australia's well-known international student boom, where the past decade has seen extraordinary growth in overseas students coming to live and study in Australia, injecting $19 billion into our economy in 2015. Australia is the third most popular destination for international students globally, after the US and Britain. But a number of Australian universities – notably Wollongong, Monash, Curtin and RMIT – have invested heavily in the risky business of offshore campuses, and are thriving.

"It is the case that not many unis worldwide have attempted to set up campuses overseas, and that those who have succeeded in doing so is a smaller number again," says Professor Andrew McIntyre, RMIT's deputy vice chancellor global development.

RMIT has two campuses in Vietnam, with about 6000 students in Ho Chi Minh City and 1000 in Hanoi. The fees in RMIT Vietnam are about half the international student fees at RMIT in Melbourne. About 37 per cent (over 25,000) of RMIT's enrolments are international students – 21 per cent of them are offshore. Increasingly, students elect to take courses at both the Melbourne and Vietnam campuses while they study.

"We see having the campuses in Vietnam as benefiting all our students," Dr McIntyre said. "It's preparing them for a globalised world of work rather than just living in Melbourne – or Ho Chi Minh City."

"It's not just about the bucks, because we wouldn't be in the places we are if it was just about the bucks."

Now India's government looks set to back a policy to encourage the world's top 200 universities to build campuses in India – a list that includes all of Australia's Group of Eight unis. With India seeking to train around 400 million people by 2022, it's viewed as an extraordinarily lucrative – if challenging – market. The University of Melbourne, Monash, RMIT and UNSW are among those already developing joint degrees and research partnerships with Indian universities. But would they build their own campuses there?

Historically, it's been a fraught endeavour.

RMIT attempted a Malaysia campus that was closed, Monash University's South African campus has reportedly struggled to turn a profit, while UNSW closed its shortlived Singapore campus in 2007. The University of Southern Queensland closed its Dubai campus and Bond University's South African endeavour closed in 2004.

Gavin Moodie, adjunct professor of education at RMIT and the University of Toronto, said unis invest in overseas campuses for many reasons. They are high-risk status plays, revenue streams and marketing opportunities, but also a way of spreading risk.

"It is noteworthy that the universities which have the most substantial offshore campuses have high proportions of international students on shore," he said. "So one motive for taking the risk of establishing a campus offshore is to spread the risk of a heavy reliance on international students onshore. Establishing a campus offshore is risky, but not as risky as relying heavily on onshore international students."

With the federal government's National Strategy for International Education predicting a staggering 45 per cent increase in onshore international students by 2025 – which equates to around 750,000 students a year studying in Australia – the question of spreading risk is going to be relevant to more and more of the nation's 43 universities, meaning Wollongong, Monash and RMIT's model could prove to be market-leading.

That's because reliance on onshore international student fees is close to one-third of revenue for many universities already, and it has in the past proved a volatile market, dependent on events outside the universities' control like the murders of Indian students in Melbourne in 2010, or swings in the Australian dollar.

For now though, the future looks bright.

"With favourable exchange rate settings and student visa policy settings and in a market which has grown for higher education by 19 per cent in the first three months of this year, Wollongong has seen a 25 per cent increase in the number of its commencing [international] students in the first quarter of 2016," said Elise Pitt from the University of Wollongong.

"Offshore and onshore go up and down over time," says Dr McIntyre from RMIT. "We're looking for a balanced portfolio for growth."

This story Could building campuses offshore be the future for Australia's universities? first appeared on The Sydney Morning Herald.