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A New Class of Investors: Embracing Student-Centric Value in Higher Education

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As you read this article, are you someone closely involved in higher education – perhaps a provider of university services? If so, you might be stirred by the headlines above. Since the late 1990s, a myriad of financial support programs for universities, with the Brain Korea Initiative at the forefront, have expanded significantly, transforming the way universities market themselves. These programs have become invaluable resources and tools for institutions to showcase their excellence both domestically and internationally. However, how students and parents – the consumers of higher education – perceive these promotional efforts is another matter altogether. Are these marketing slogans truly achieving their intended objectives?

The steady increase in the college-age population and the soaring university enrollment rates in South Korea, predominantly driven by private institutions, fueled the quantitative expansion of higher education up until the late 1990s. As the demand for university degrees surged, a supply-oriented paradigm and an asymmetric power dynamic became deeply entrenched. However, the stark reality that the number of universities that can fully benefit from this situation is considerably lower than in the past has shaken the core of South Korea's higher education sector. Today, the 'consumer perspective' is increasingly being embraced by universities as a means to respond to these changes. The focus on student-centeredness, student success, and student engagement in discussions about the utility and future direction of higher education serves as evidence of this shift.

Thomas Kuhn, a philosopher of science, once said, "What is accepted as knowledge is only challenged in times of crisis." In an era when universities are facing crises, they are called upon to break free from the knowledge, thought, and belief systems that have long been taken for granted. In this context, 'value' and 'investment' can be the driving forces behind a revolution in the higher education paradigm. Moving beyond viewing students and parents merely as 'customers,' redefining them as 'investors,' and restructuring all aspects of an organization accordingly can be an effective strategy for enhancing a university's competitiveness. The value derived from a supplier perspective truly shines when it is successfully translated into worth from an investor standpoint and effectively communicated to the intended audience.

The moment students and parents are redefined as investors, admissions offices become investment attraction headquarters, admissions promotion and external cooperation become investment attraction activities, admission briefings turn into investment presentations, and student management and guidance transform into 'Investor Relations (IR)'. There's a prevalent understanding in American universities that they must meet the expected returns on such investments. Many American institutions openly disclose the total costs, or the investment principal, for obtaining a degree. This includes not only tuition but also dormitory fees, living expenses, student loans, and even costs such as airfare and processing fees for international students. Alongside, they often provide in monetary terms, the average annual salary at the first job post-graduation, potential wage growth, and so forth - a direct application of the concept of return on investment.

The redefinition of a target corresponds with the 'redefinition of value'. Investors in capital markets expect returns denominated in currency, but investors in universities anticipate transformative growth in a high-quality learning environment, prospects in their desired career field, and ultimately, a successful life. Therefore, a clear idea of what value package is offered against the resources invested should underpin various elements that compose a university's attractiveness. Constructing a distinct value system, segmenting stakeholders who wish to invest in the university, and strategically communicating this should be central activities penetrating major university agendas, such as attracting international students, expanding global networks, improving the quality of education, selecting excellent students, contributing to local communities, and promoting research and development (R&D).

'The Era of Students Choosing Universities' is a subtitle of a book in which titans of higher education and technological innovation present a blueprint for the future of universities and education. Those who have struggled for decades to be chosen by universities now stand before us as investors, returning to select a university. They ask, "What benefits does the university offer me?" Is there a convincing answer prepared for this simple yet challenging question? Have they secured value-setting and communication strategies to transform these unseen investment intentions into concrete selection behaviors? This is a question that the academic community must continuously reflect upon to survive as an attractive investment target.

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*Disclaimer

This content is a translation of an article originally composed in Korean language, which was published in July 2022 on the University News Network, a premier media outlet in South Korea dedicated to higher education. For the original article, please visit https://news.unn.net/news/articleView.html?idxno=531681.

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