Capitalizing on Niche Markets in Higher Education: A Look at International Education
Colleges and universities are facing many challenges today. Moody’s Investment Services recently released the findings from its annual review of financial conditions at higher education institutions whose bonds it rates, noting that nearly 30 percent of public and 20 percent of private universities will suffer declines in revenue in 2014. The firm also predicts that half of universities will experience decreases in enrollments.
Among these downward trends, there has been an emergence of numerous niche markets. By finding the right partner to help guide them through these opportunities, universities can grow and evolve in the face of persisting challenges.
One example of a niche market is international education. A joint study by The British Council, Universities UK and IDP Education, Australia, predicts that the total global demand for international student places will double by 2020, reaching approximately 5.8 million. Some American institutions have been actively recruiting this population. According to the recent Institute of International Education’s “Open Doors” report, the number of international students studying at American colleges and universities grew for the seventh consecutive year. 
Bright students from countries such as India, China, South Korea and Saudi Arabia are driving this growth, with the knowledge that a high-quality education will help them succeed in a global knowledge economy. But too few institutions are rising to meet this demand.
The “Open Doors” report revealed that international students comprise 3.9 percent of all enrollments at American institutions. Additionally, just five percent of colleges and universities in the United States host 69 percent of all international students in the country.
This is a disproportionate distribution. A diverse student body enriches the learning environment for all students, increasing their exposure to new perspectives, cultures and ideas that will prepare them to succeed in today’s interconnected world.
The institutional impact is also great. The total number of international students is still growing, but the United States is losing market share to other countries. For example, the OECD’s “Education at a Glance” 2013 report shows that the United States hosted 23 percent of all international students in 2000; by 2011, however, that amount had dropped to 17 percent. Reversing this trend will take a concerted effort by all institutions to invest in transnational education.
Taking on such an initiative could appear a daunting challenge for some universities. Competing internationally with the likes of the University of Southern California, New York University, Columbia University and the University of Texas, may seem an impossible task for mid- and smaller-sized schools, especially in the face of other external pressures, but the potential benefits are great.
Serving international students offers institutions the opportunity to create a 21st-century academic experience, enrich the diversity of a campus and create a new revenue stream — a critical factor given the immense internal and external budget pressures currently bearing down on American universities. Today, the most pioneering universities are meeting these demands with comprehensive internationalization agendas that expand academic and support offerings, diversify revenue, build a global profile and bring global perspectives into their classrooms.
INTO’s American partners provide successful examples of these efforts. This year, the University of South Florida and Colorado State University received the Senator Paul Simon Award for Campus Internationalization from NAFSA: Association of International Educators for their commitment to comprehensive internationalization. These two universities and Oregon State University reported double-digit international student enrollment growth and considerably outperformed the 7 percent national average international enrollment growth.
Our partners understand how a niche market such as international education is key to their own growth and evolution. Opening the doors of higher education improves access for international students to quality higher education and helps prepare domestic students for today’s globalized work environment.
Higher education is in the middle of a significant transition. Exploring niche markets, such as international education, with qualified, respected partners can help today’s colleges and universities navigate the challenges they face and find a better path to tomorrow.
This piece is adapted from a blog post originally published by Stremba on the INTO blog in December 2013.
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 Jon Marcus, “Moody’s: college money woes are getting worse,” The Hechinger Report, November 22, 2013. Accessed at http://hechingerreport.org/content/moodys-college-money-woes-are-getting-worse_13953/
 Anthony Bohm et al, “Vision 2020: Forecasting International Student Mobility, a UK Perspective,” The British Council, 2004. Accessed at http://www.britishcouncil.org/eumd_-_vision_2020.pdf
 Institute of International Education, “Open Doors,” 2013. Accessed at http://www.iie.org/research-and-publications/Open-Doors
 OECD, “Education at a Glance 2013: OECD Indicators,” 2013. Accessed at http://www.oecd.org/edu/eag.htm
 NAFSA, “NAFSA’s Internationalizing the Campus Report,” 2013. Accessed at http://www.nafsa.org/Explore_International_Education/Impact/Awards/Senator_Paul_Simon_Award/NAFSA_s_Internationalizing_the_Campus_Report/
Author Perspective: Business