Leader: We must adapt to survive

International students contribute some £5.5 billion to the UK economy each year. But what happens when countries that once sent their students abroad for a quality education start getting ambitions of their own? What happens when you can get a UK degree more cheaply in Kuala Lumpur than you can in London? Where does that leave us?

The market is evolving, and Malaysia is proof that the traditional model of relying on students to come to Britain is truly out of date. Nations that once had only a net outflow are transforming themselves into host countries, building high-quality, sustainable higher education systems and attracting a net inflow.

This threat to Anglo-American dominance has been dubbed "new global regionalism" by Don Olcott, chief executive of the Observatory on Borderless Higher Education, and it is likely to have a long-term effect on the UK and US. In the case of Malaysia, a positive colonial legacy has come to our rescue. Instead of looking to the more geographically sensible option of Australia, Malaysia has turned primarily to British universities to help it develop its offering.

Luckily, other countries with their eye on "hub" status, such as India, China, South Korea and the Gulf states, are not an immediate problem, as they have started so far behind us that it will take some time before they come anywhere near catching us up.

Even so, the heads of the UK and US universities who produced the recent report for Gordon Brown, Higher Education and Collaboration in Global Context: Building a Global Civil Society, raised a crucial hypothetical question: "Twenty years from now, on a list of the world's top 100 universities, how many will be in the USA or the UK? How many will be in countries not presently represented on world rankings lists?" It is a sobering thought.

Of course, there will always be students who will want to come to study here or in the States, but the days of a one-way flow of international traffic are over. Sir Drummond Bone, former vice-chancellor of the University of Liverpool, in a report to government last year on the future of higher education in Britain, rightly pointed out that Britain had to start sending its own students abroad, too.

The University of Nottingham has been at the forefront of this movement with a full overseas campus model in Malaysia and another in China. For UK students studying there, it is a case of "what's not to like?". One describes it as a "once-in-a-lifetime experience to mix your academic life with travel" - and all for a fraction of the living costs.

For universities, however, setting up a campus is an expensive and risky option. Most are opting for less ambitious partnerships and twinning arrangements. It is here that the post-1992s are enjoying their place in the sun. When "the key issue for Malaysians is employability", according to Pat Killingley of the British Council, it is those offering business, IT and nursing, rather than more traditional "academic" subjects, that are in demand.

Transnational education should be viewed not as a threat but as an opportunity to diversify and reach even more students with UK degrees. Ultimately, though, it comes down to survival: we have to embrace this model of providing UK degrees to overseas students if we are to have any future in an international market.

ann.mroz@tsleducation.com.