Published on 2013/06/26

The Commoditization of Higher Education in Finland

The Commoditization of Higher Education in Finland
In Finland, undergraduate students — whose education is subsidized by the government — tend to choose higher education institutions based on reputation, while professional and continuing education students tend to base their choices on the student experience offered.

In the following interview, Kirsti Miettinen, head of continuing education at Aalto University, discusses the impact the commoditization of higher education has had on the Finnish higher education system, and how institutions are adapting to the changing marketplace and increasing competition in the industry. Miettinen discusses the differences in the way traditional and continuing education units operate as a result of Finland’s unique tuition laws, and provides some insights into the impacts MOOCs (Massive Open Online Courses) and online learning have had on the market.

1. How do institutions differentiate themselves in the crowded Finnish higher education marketplace?

Finland’s higher education system is historically recognized as being highly reputable and strong. The government’s regional politics have made it possible for Finland to boast having one of the highest ratios of higher education institutions per capita in the world. Universities focus on disciplines agreed upon with the Ministry of Education. Regional politics ensure the most “important” disciplines — such as engineering, business, medicine and education, among others — are available almost anywhere in Finland. Understanding and serving particular focus areas, and even sharing the market between peer universities (e.g. engineering universities), has been on the agenda of every university since 2010, when widespread university reform saw higher education institutions gain autonomy

Finland is a small country and those interested to know about higher education provision either already have all of the information or can access it easily. It seems the young generation is very aware of the reputation, of the quality — the brand — of the nation’s higher education institutions.

Differentiation among professional and continuing education providers follows very much the same lines as their undergraduate counterparts. The offerings are mostly based on the strong research and education areas of the particular university. This is the most important advantage for university professional and continuing education in a hypercompetitive market, where we compete with educational providers and consultants (not so much with other universities) who are providing very high-quality, competency-based development opportunities for professionals and organizations.

2. What are the majority of students in Finland looking for when they enroll in higher education? Have these preferences changed in the past 10 years?

Choosing the university to enroll in is not as simple as throwing darts at a board, even though degree program tuition in Finland is free for students (and subsidized by the government).

In Finland, most of the universities choose their students through entry exams and secondary school grades. Thus, there is already a market where, very often, those universities  considered best in certain disciplines get the best students. However, this is not always true. Sometimes, undergraduate students choose the university either by location (e.g. close to home) or by its good reputation for other things beyond “being the best in x discipline.” For example, an institution can have a good study environment and be popular without dominating any one field of study.

In professional and continuing education, the paying customers most often look at content rather than brand. As most students in these programs are enrolled while working full-time, many choose the closest higher education institution that offers the content they need. Or, as I stated above, some companies might prefer other types of high-quality educational providers to cater exactly to their needs. Of course, the reputation and brand of a university helps it to be noticed above the crowd.

In terms of change over time, I have not seen much change in this regard over the past 10 years.

3. How significantly do the quality of education and student experience differ between high-priced and low-priced institutions?

Since traditional higher education programs — up to PhD levels — are free in Finland, this question concerns only professional and continuing education.

I would like to argue that in today’s marketplace, the student — or customer — experience is always significant. The price level in the Finnish continuing and professional education market seems to be more or less standardized to specific target groups or customer segments. I could divide them into three categories: top-tier management with high-price offerings, professionals with medium-price offerings and entrepreneurs or other target groups with low-price offerings, where the education is most often subsidized by the government.

I am not sure that between these different categories there is much difference in quality of education or student experience. Of course, inside high-priced management institutions, you can provide high-priced, world-class experts to your audience. But this does not necessarily mean the quality or customer experience is that much higher than in other categories. Everything is just priced by the market.

4. How are local institutions changing the way they approach the higher education marketplace as MOOCs branded by elite institutions and online programs are becoming more prevalent?

At the moment, in Finland, we are not so worried about the MOOCs or other online programs entering the marketplace. They seem to be used more often for marketing purposes and it is interesting to see what kind of business models are developing around them, especially in professional and continuing education.

But even in our degree-for-free and language-specific local market, we see the global competition in education at all levels increasing. I fully agree with those who say that since information is online and everywhere, the role of educators is changing rapidly towards facilitating the transfer of information, skills and learning.

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Readers Comments

Rhonda White 2013/06/26 at 10:32 am

It’s a bit troubling to think that even in a system where higher education is free, institutions’ reputations could still differ so much. This raises the question of whether we can ever level the playing field, since some degrees are seen as more valuable than others.

Quincy Adams 2013/06/26 at 3:17 pm

I won’t pretend to be an expert on the Finnish higher education system, but it seems to me that in such a heavily controlled industry — where the government even decides which disciplines universities will focus on — there isn’t a lot of room for creativity or innovation. Both of these are desperately needed to keep institutions relevant and competitive.

    Lauri Nieminen 2013/06/26 at 4:49 pm

    Actually, I don’t think Finnish institutions are quite as restricted as you imagine them to be. In addition, government involvement in higher education can be a good thing, as evidenced by the Finnish government’s important role as a quality assurance mechanism.

    Contrast that to the United States experience, where open competition allows some truly questionable higher ‘education’ providers to enter the market. The Finnish higher education system is consistently ranked near the top in the world. It must be doing something right.

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