Invasion of the student snatchers

The brave new world of borderless education has arrived. Next month the University of Phoenix, dubbed the McDonald's of higher education in the US, expands into Europe when a campus is unveiled in Rotterdam, the Netherlands. Later this year, it will be opening another European campus - this time in Germany.

Europeans will have the chance to sign up for American degrees in business and management, and in information technology. They will also be able to sample Phoenix's curious brand of customer friendliness, which combines ferocious nannying with assiduous attention to the car-parking needs of their adult students.

Universities in the United Kingdom can breathe a sigh of relief that the multi-campus Phoenix has no plans yet to open its doors to UK self- improvers. (It says that the market is well-developed here, certainly compared with the situation in the Netherlands and in Germany.) But there is no certainty that Phoenix - or another competitor - won't arrive later on, providing an unwelcome wake-up call to British higher education.

The spread of universities like Phoenix - as well as the big expansion of distance learning and the launch of corporate universities - has persuaded university bosses to act. The Committee of Vice Chancellors and Principals is holding a conference later this month, sponsored by ICL and The Independent, to examine the new competition. The committee has also commissioned Professor Robin Middlehurst, of Surrey University, to look at the growth of new kinds of higher education around the world.

In a report to be published in December, she will recommend how universities in the UK should react to global competition.

"There are some opportunities there - and some threats as well," says Professor Tim O'Shea, Master of Birkbeck College, London, who will be speaking at the conference.

"The threat is that you get a high-status university coming into partnership with an industrial partner who understands the technology. They produce something of good educational quality. Through the technology, they get to a wider audience and take away the best parts of the student market. An obvious example is the master's in business administration."

A well-marketed MBA from a leading management school in the US can compete with an MBA from a British university because the qualification is international. An adult working in a company in the UK could ask: "Shall I nip down the road to a local university, or shall I simply log on to Harvard?"

The notion spooks UK universities who regard their business schools as a welcome revenue-generating part of an otherwise poorly funded business. It must also spook other European schools, notably Rotterdam School of Management (part of Erasmus University), which will be competing locally with Phoenix for management students, and IESE, the well-regarded business school in Barcelona, which faces local competition from the University of Chicago. (The latter announced through an advertisement in the Financial Times recently that it was starting an international MBA in the city.)

But there is another reason why this matters: expansion prospects in higher education lie mainly with adult learners - precisely those MBA students whom traditional universities are so worried about losing. The demand from people in the workplace for further qualifications is expected to increase rapidly.

In 10 years' time, it is likely that thousands more 35-to-40-year-olds will go back to get higher degrees. Therefore, traditional universities should be thinking now about how to cater for them and their studying needs - for example, when these adults will be free for lectures and how they will be able to wrap a curriculum around busy working lives.

"The universities ought to be selling themselves on this basis. If they don't, American universities will use distance learning methods and they will swamp us before long," says Professor Ken Mortimer, manager of Ford's European programmes.

But there are opportunities as well as threats - as the Open University knows well. As the international brand leader in providing degrees by distance learning, it has been cashing in on its name and expertise - and expanding all over the world, including the US.

The OU has developed partnerships with public universities in Florida and California; in the latter state it is about to launch a teacher-training qualification to the 30,000 Californian teachers who are unqualified; in Florida it is planning courses in IT and liberal arts via the community college network. In addition, it has set up its very own US Open University, which has won American accreditation and is to offer courses jointly with the new distance-learning Western Governors University. It will also be putting on its own courses, the first of which is a business course for SmithKline Beecham employees starting next month. Later this year it will be rolling out courses in computing and in international and European studies.

Other British universities - or groups of universities - should similarly be able to take advantage of their expertise to market, for example, introductory undergraduate courses in mathematics at university level around the world, making use of the new technology.

Another threat to traditional higher education comes from what are called "corporate universities". These are often training outfits that companies have established to ensure that their employees are at the cutting edge of the global competition. Most work closely with universities; none has the power to award its own degrees. Companies that have set up their own outfits include Ford, Unipart, British Aerospace and Motorola. GEC is trying to create one. Chris Yapp, a consultant and ICL fellow, thinks that at some point one of these universities is likely to be floated off as a private institution.

"That will be a very formidable competition to the more traditional university," he says. "I think the traditional universities have got to wake up to the business of lifelong learning."

Lady Chisholm, director of development at the OU, believes corporate universities are challenging the status quo, though not straightforwardly.

"Corporations are not setting up rival universities, but they are doing things that challenge the way universities carry on," she says.

"They're setting up institutions not because of any failure in the current system but because they want to train in a different way and to give status to that training."

These corporate colleges deny that they are a threat to the established order. For instance, Professor Mortimer says that his company would not want to set up an independent education arm. Ford works in partnership with existing universities, he emphasises.

"We believe in working with universities, not replacing them. We like our partnerships," he says. "We think they're very valuable and we will continue with them in the form they operate currently."

Ford has around 1,500 students doing degrees in Europe - and does so in co-operation with universities such as Bradford and the University of East London. Its education programmes - Ford is careful not to call them "university" courses - have been going for eight years and Ford pays all the costs. Last year the company saved pounds 11m as a result of research carried out by a handful of employees taking a master's degree at Bradford University. They came up with improvements to the engineering process in the manufacture of cars.

"We make a lot of money, the staff get a degree and the university learns something about a work situation; we all benefit," says Professor Mortimer.

The conference `New Model Universities' is on 29 April at the Barbican Centre, London EC2Y. The keynote speaker is Michael Wills, the Parliamentary Under-secretary at the Department of Trade and Industry. For further details, ring 0171-240 9393

e-mail: lucy@scribbl.demon.co.uk

`STUDENTS ARE DROPPED IF THEY DON'T LOG ON FIVE OUT OF SEVEN DAYS'

The University of Phoenix is one of the most student-friendly higher education institutions in the world. In America it is called the McDonald's of higher education because it offers a standardised product at uniform quality; in short, it provides value for money. "You know when you come in what you are expected to get out of it," says Dr Jorge Klor de Alva, Phoenix's president, who will address the conference in London on 29 April.

With 62,000 students, it is the largest private university in the US. "We know that education for working adults must harmonise with full personal and professional lives," says the university's blurb. Classes are held at times and in places to suit busy adults. Ninety per cent of students attend courses at one of the campuses in the 15 states in which it operates and in Puerto Rico, Vancouver and British Columbia; the remaining 10 per cent study by distance learning.

The university boasts a course completion rate of 97 per cent and a graduation rate of 65 per cent - very high by American standards. It achieves this by keeping a close watch on its customers.

Students are dropped if they don't log on five out of seven days of the week. "We run it as a cross between the training of Jesuits and the training of the US Marines," says Dr Klor de Alva. "In other words it's highly disciplined and very organised."

Staff/student ratios are good, better than those at some British universities, and teaching is carried out primarily by people working in the field in which the student is studying. Prior learning is assessed and counts towards the degree. All students are aged over 23 and all must be employed. In fact the students are doing rather well for themselves - they work in business or as nurses, teachers, counsellors or technicians and the average household income of those undertaking the face-to-face courses is $55,000 (pounds 34,300) a year or, for the distance learners, $76,000 (pounds 47,500) a year.

Crucially, campuses are situated on the edge of freeways so that students can make a quick getaway after classes. "We're a wake-up call to higher education in America because we're in a market that most US higher education institutions are not," claims Dr Klor de Alva.

Not surprisingly, income is healthy. An MBA from Phoenix costs $24,000 a year (about pounds 15,000). Revenues in the fiscal year 1998 were $391m (about pounds 24m).

For more information: http://www.uophx.edu