Exporting Higher Education: The Modes of the GATS

If American colleges and universities want to maintain their favorable balance of international payments, they will have to venture into new territory. All signs indicate that Consumption Abroad is on a downward spiral for some amount of time. In GATS terms, this category is referred to as "Mode 2." "Mode 1" is Cross Border Supply, which is generally understood as traditional, independent-study-style Distance Education. Services are delivered through postal correspondance, radio or television, or the Internet, and are thought of as primarily asynchronous, with no real-time interaction between instructor and student. With the increasing capabilities of videoconferencing and virtual classroom systems, however, the very nature of Cross Border Supply may be changing.

Commercial Presence, or "Mode 3," is a more recent approach to the internationalization of higher education, involving the establishment of branches or subsidiaries, which may depend on local partners. There are several variations on this theme, which has been encouraged by a number of South-East Asian countries as a way to meet a burgeoning demand for advanced training and education, while keeping students in their homeland. The forms Commercial Presence has taken have been identified (Nokkalla, dos Santos, Kaufmann, Phillips & Stahl) as:

1) Branch Campus, in which a higher education institution establishes and operates a facility for delivery of services in a country other than the one in which it is based.

2) Twinning, in which institutions of higher education in different countries adopt each other's course design and content -- the European Credit Transfer System is a high-level Twinning mechanism.

3) Franchising, in which an organization in one country delivers all or part of the courses and overall program specified by an institution of higher education located in another country.

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Overall, Commercial Presence suggests a more substantial involvement than Cross-Border Supply. Whether it is done through its own faculty and staff or through intermediaries, the purpose of a Commercial Presence is to provide a brick & mortar location with flesh & blood instructional support.