Brexit Letter Chills Universities as Annual $1.5bn EU Research Funding Goes ‘Poof’

First published Oct 27: The looming shadow of Brexit came to the U.K. tertiary education sector this week with news that one of the governing Conservative Party MPs, Chris Heaton-Harris, has written to heads of British universities asking for names of professors “who are involved in the teaching of European Affairs, with particular reference to Brexit.”

He also asked for a copy of the syllabus of any such courses, and links to online lectures. The response from academic leadership has been unusually strident (not ringing with British understatement) calling it “McCarthyism,” and refusing to comply.

Faculty and students in every discipline including business management voted four in five to remain in the EU. The Brexit government has duly been given a bumpy ride from this community which is, among other tangible and intangible losses, waving goodbye to $1.5 billion a year in EU academic research funding.

Downing Street disowned the Heaton-Harris monitoring ploy, reasserting commitment to academic freedom. But anything is possible in domestic Brexit politics which is becoming more evangelical than rational, and logging and tracking dissenters while apparently defending their right to exist is well recognized as chapter one, paragraph one of the totalitarian playbook.

At the same time, Michael Bloomberg was in London for the opening of the new Bloomberg European headquarters, putting a brave face on having ploughed $1.3 billion in what had looked like the mothership but now is the bobbing dinghy alongside.

“It is really hard to understand why a country that was doing so well wanted to ruin it,” said Bloomberg.

As he points out, the problem wasn’t border control, and it wasn’t alleged EU bureaucracy (citing Foreign Secretary Boris Johnson’s fabricated banana-bunch allegations.)

To assuage Bloomberg’s perplexed-ness: if you’re not well-educated, well-employed and a property owner in the South East, you have seen nothing of the new-Britain miracle. In fact you almost certainly have it worst than your parents now that income support and social services are eviscerated, first-rung employment is splintered with zero-hour contracts, serious tuition fees apply to all credible university programs and student maintenance grants are gone.

Moreover, education-based social mobility is less possible than it ever was. For example, just last week it was revealed that Oxford and Cambridge in 2015 offered more places to pupils at one single high school (Eton, where tuition is $44,000 a year) than to all pupils at all schools across the country whose families qualify for free school meals (three households in 10).

Brexit is the political fallout from systemic non-trickle down of a country’s economic success — which is also the main theory that explains the “mystery” of Trump’s enduring electoral base.

The Brexit-Trump parallels extend to whipping up nationalism and xenophobia. To this, in London Bloomberg also said, “Whether we change the immigration laws or not, there is general feeling around the world that America is no longer an open, welcoming place and a lot of people don’t want to go there, and the same thing is happening in the U.K. because of Brexit.”

Despite growth of online and other EdTech options, much of tertiary and executive education still happens face-to-face, for which people travel or relocate, and therefore the tertiary and executive education industries are highly vulnerable to tightening borders.

CNBC last month reported a General Management Admissions Council (GMAC) survey showing three quarters of U.S. 2-year MBA programs received fewer applicants from abroad this year, a drop directly ascribed to the narrowing political climate. (The 2-year full-time MBA is also under pressure from one-year intensive and weekend-flex options).

Idalene Kesner, Dean of the Kelley School of Business told CNBC, ”There’s this general sense of what’s going on in the U.S. from a cultural standpoint, I think that they are hearing things in the news, and they [would-be students] are a little bit worried, will they be as welcome as in previous years.”

Similarly, the British admissions service UCAS in July reported that the number of foreign applicants to British universities had dropped by 25,000 year-on-year. Foreign (currently non-EU) students pay 2x or more in annual tuition, a significant source of university revenue.

As Anglo and American universities see their governments erode their long-standing funding and business models, they also face an even larger trend of high-quality education moving East. This is true particularly in business education, where English-language business schools in mainland Europe, the Emirates, and Far East have rapidly gained and held ground in the top tier of MBA and Exec Ed rankings.

This is a known long-running trend, but there may even be further upside surprises, for example if Saudi Crown Prince Mohammed bin Salman, who became official heir to his 81-year-old father in June, opens that country to become a real hub of business connectivity, as indicated.

Further East, the education industry landscape is at a rolling boil. One barometer of this is the EdTechXAsia summit and vendor exhibitions starting next week, which is expected to attract 5,000 education sector leaders and investors as the conference moves from Singapore to Tokyo and Beijing during November.

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