Tony Tysome examines a plan for universities to adopt radical measures to retain international business interest.

British universities must consider radical measures such as setting up call centres in India to handle some student services if they are to maintain a competitive advantage in the global higher education market, a report will advise.

It says that unless institutions adopt the cost-cutting tactics of multinational corporations and begin outsourcing work overseas, international investors and students will take their business elsewhere.

The report, to be published by the Council for Industry and Higher Education ahead of a conference next week, will suggest that a more management-oriented approach to higher education could mean a significant change in the way academics work. They may, for example, have to move away from the "cult" of the individual researcher towards the more collaborative style of research institutes in Germany.

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It says that the "full economic costing" model for university finances threatens to price UK institutions out of the increasingly competitive international market.

It adds that institutions should consider applying business tactics to mainstream research by, say, farming out technical tasks such as data and statistical analysis to Indian universities, which have a reliable record in this area and could do the work more cheaply than a UK institution.

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The report - which surveyed the heads of 45 multinational businesses for their views on the competitiveness of UK higher education - recommends these moves as part of a drive towards building more strategic partnerships between UK and overseas institutions.

This could be linked to the second phase of the Prime Minister's Initiative, launched last week, which is designed to foster and support international partnerships and staff and student exchanges, as well as attracting more overseas students to this country.

Richard Brown, CIHE chief executive, said: "We have a chance here to steal a march over the competition, but to succeed we need to learn from business the advantages of setting up partnerships in Asia."

UK institutions have many key strengths to offer multinational businesses that invest in higher education, as well as graduate recruiters and international students, according to the report. These include a strong research base, a problem-solving approach to education and a multicultural environment.

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But increasing competition worldwide, particularly from China and India, will threaten these advantages unless steps are taken to preserve them.

The report recommends fundamental changes in the way UK higher education is funded and organised.

It calls for continued government investment in research, and a replacement for the research assessment exercise that will recognise and properly fund applied, practice-based and problem-focused research.

Finally, it urges Universities UK, industry leaders, the British Council and government departments to launch a debate on how universities and businesses might share expertise and offer better value for money by partnering Asian universities.

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tony.tysome@thes.co.uk

The CIHE conference on the competitiveness of UK higher education will be held at the Royal Society in London on May 4 and at Manchester University on May 12.