RISIS Reasearch Seminar: Business Model and Value Creation in Higher Education

The paper discussed in the presentation aims to contribute the debate on competition in the Higher education sector through the concept of the business model applied to HEIs. By considering how value is generated and captured from customers, we suggest four ideal business models, which also translate into different expectations on HEIs’ level and composition of revenues. These models are: a) a “public good-based” model, where value creation relies on positive externalities for stakeholders and the society as a whole and, accordingly HEIs’ are directly subsidized by the state, b) a “reputation-based” model, where the value creation is associated with the excellence in scientific standing, c) a “public service-based” model, creating value through a public service mission for the community interests and d) a “private good” model, where value is associated with private benefits for students and companies. We then apply these models to a large set of HEIs derived from the European Tertiary Education Register by considering variables on revenues’ levels and composition and on research activities in order to identify seed groups; we further descriptively analyse some exemplary cases in order to substantiate the proposed models. While business models in higher education have been documented elsewhere through individual case studies, to the best of our knowledge, our paper offers the first systematic analysis of the possible ways  European HEIs might generate value and revenues from different sources. Implications for higher education policies and management are further discussed.