With the advent of mass higher education and growth in internationally mobile students, the global higher education market has witnessed a massive boom. Globalization has paved the way for “inclusion,” and higher education’s role in changing mindsets is critical. However, the rapid increase in demand has posed a series of new challenges that need to be addressed more effectively.
For example, affordability in higher education is a concern for students, parents and policymakers. Over the past 30 years, the inflation-adjusted cost of a bachelor’s degree has gone up by two and a half times. At the same time, the inflation-adjusted wage growth has been much more subdued.
Furthermore, to achieve the rate of GDP growth recommended by the World Bank to elevate people from the basic levels of abject poverty, the number of higher education seats would need to increase at 7-8% per annum over the next decade. This implies the need to double the number of seats in the next 10 years.
L.E.K. has in-depth experience in the higher education space to help with those challenges and many others the sector is facing at the moment. We advise clients in all areas of public and private universities, colleges, and technical, vocational and training institutions.
How we help
Our Global Education practice works with public, private nonprofit and private for-profit institutions of higher education. We also work with private equity investors targeting the higher education industry.
- Find new revenue opportunities. Examples include new ways to deliver education, new types of degree- and nondegree-based programs, and new segments of students to serve. We can also support your efforts in transnational education via strategies for building pathway programs, introducing digital offerings and setting up a campus abroad.
- Meet/exceed student expectations. We bring insight into the needs of traditional and nontraditional students, both as they exist today and as they’re likely to play out in the future. This can touch on facilities, digitization, postgraduation employment prospects and more. We can also shed light on how much students are willing to pay for higher education, along with other factors that go into a student’s choice of institution.
- Keep tuition hikes in check. From operational efficiencies to public-private partnership models and strategic reduction of structural costs, we work with you on ways to remain financially sustainable in a consumer-based education market.
For more on how we help clients create value in higher education, consider the following examples:
- Diversified revenue for a research university. Determined to reduce its reliance on existing revenue sources, a leading university in the Middle East sought our help in uncovering other opportunities. We began with a look at the kinds of revenue flowing into other universities (mature and growth-stage institutions alike). Then we ordered these opportunities by priority, taking into account the regional dynamics for our client as well as its organizational capabilities and potential to create profit and value for various stakeholders.
Next, we took the higher-priority ideas and weighed how they might perform in the local market. This included identifying target customers, determining demand potential and analyzing the competition. Based on our findings, we formulated recommendations around product configuration, organizational capability and resource requirements, marketing strategies, possible collaborations, risk mitigation, and key performance indicators. Finally, we created a business plan and road map for setting up each priority revenue source as a business unit.
- Realigned academic offerings for a research university. We helped this Australian university get a better handle on student demand for each of its offerings. This involved analyzing international and local student mobility trends in detail. We also looked at the institution’s core offerings and found where it had gaps relative to competitors. With that information, we forecast the demand for each offering under a variety of scenarios and then recommended ways to improve the offerings for greater market share.
- University internationalization strategy. We worked with the leading network of for-profit higher education institutions seeking to grow its transnational education market offering by expanding programs for onshore international students and enhancing offshore presence in multiple countries. We identified potential growth opportunities in the Asia-Pacific region (outside of Australia) by conducting targeted research and developing the most appropriate strategy for the network.