As Australian universities launch new transnational education operations, two distinct business models are being pursued:
- some universities are focused on a non-profit model, which ensures surpluses are reinvested in the countries they earned the revenues in, and
- others are pursuing for-profit models which allow them to repatriate their profits from these operations and use them to fund their activities in Australia and elsewhere.
Indonesia and India are important geopolitical partners for Australia, and as such it is unsurprising that our universities are leading the world in establishing branch campuses there.
Monash University was the first overseas university to establish a physical campus in Indonesia. Yayasan Monash University Indonesia, known as Monash Indonesia, received a lot of attention when it was first announced but what has received less attention is the meaning of the term ‘yayasan’.
A colleague with deep expertise in offshore TNE and a large number of connections across the Indonesian university sector explained that a yayasan is a non-profit foundation that must be used by overseas universities wanting to establish campuses in Indonesia, and which must have Indonesians as the majority of its members. In advice to Study Melbourne, PWC states that the yayasan is “prohibited from distributing any profit from its activities”. Further, it is my understanding that in the event that the yayasan is liquidated – its assets must transfer to another yayasan.
Western Sydney University has been explicit about the yayasan foundation it will establish to operate an Indonesian branch campus. The same model will apply to CQU’s branch campus when it is launched and to the Deakin University, University of Lancaster, Navitas partnership which is establishing an Indonesian offshore campus.
By contrast, when Deakin University and the University of Wollongong launch the first overseas university teaching campuses in India, they will be able to use a for-profit model – because their campuses will be located in India’s new special economic zone, Gujarat International Finance Tec-City (GIFT City). While there are regulations on overseas universities operating in GIFT City, they do not need to comply with domestic Indian university regulations and can readily repatriate profits.
Superficially it would appear that the GIFT City option is an easier model for Australian universities to pursue, but it will not be without its challenges, and, notably, both Deakin and Wollongong universities intend to start small in their Indian operations.
These different TNE models pose distinct opportunities, challenges and risks, which I will tease out in a future Koala News article.
Claire Field is a consultant and advisor to the tertiary education sector. To find out more visit her website.
