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Bloomberg reports in an insightful article on the new reluctance to expand U.S. higher education brands overseas, a discernible backlash to the  expansion wave of ten years ago, when a number of Ivy League schools and other institutions with a large number of incoming international students attempted to grow via branch campuses abroad. The mood has changed for a number of reasons and it looks like institutions are not only scaling back their efforts, some are ready to admit outright mistakes:

“You look at the institutions that have done the campus; almost all of them have come to not a good end,” said Emanuel, at Philadelphia-based Penn. “None of the big three — NYU, Yale, Duke — have gone without a hitch. And each one of them has run into various backlashes. It’s a major reason you have a pause from other schools.”

At the same time, massive open online courses, or MOOCs, and other technologies have changed the equation for colleges considering overseas expansion, said Michael Horn, executive director for education at the Clayton Christensen Institute for Disruptive Innovation […] “It allows you to have a presence overseas in a much more affordable and scalable way than ever before,” he said.

For schools looking to create an overseas experience for their domestic students, MOOCs and other technologies won’t deter them, said Horn, who is based in San Mateo, California. However, “if your mission is to reach out and improve the lives of millions of students no matter where they are, that’s a very different decision set now,” he said.

There is too little attention paid, me thinks, to the overall change in economic climate and growth figures, however. The overseas campuses are not attracting the kind of business that would make them viable extensions in the long term, because attempting to extend a higher education brand overseas represents more of a dilution than an actual value-add from the point of students. While MOOC and similar formats can indeed address a dearth of high-quality learning opportunities in some countries, but it is hard to see how they will re-create other aspects of especially undergraduate education that emanate from an on-campus community, physical proximity to teachers and fellow students, a shared rhythm of life and the diverse social environment that contributes to motivation, networking and personal growth.

Overseas campuses seem in fact to promulgate an expensive, elite-driven U.S. model of higher education that allows access to institutions with powerful brand equity to customers willing to pay the corresponding high price of tuition. The added-value promised by the brand is mostly based on research prowess of these organizations, however, not on the quality of their teaching. This is not to say that excellent teaching does not happen at these institutions, simply that there is no systematic data on the quality of their teaching and correspondingly little impact in the respective institutional rankings.

MOOC do have the potential to change that, by making teaching overall more transparent and potentially more quantifiable in terms of outcomes and efficiency, once the current enthusiasm for Learning Analytics manifests itself in organizational change. But scaling back overseas expansion with a nod to MOOC opening up this part of the academy seems like a technological fig leaf to cover up over-ambitious investments into real-estate and infrastructure, some of which are now turning into expensive write-offs. Arguably, virtual formats for teaching undergraduate students will be tied much more closely to individual teachers and not to (large) institutions. Universities need to reconsider their branding strategy in this light, to attract both qualified, innovative instructors and motivated students – whether at home or overseas – as the input and output of research activities will not be sufficient much longer.