THE MODEL. David Pearce Centre for International Economics
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1
2 THE MODEL David Pearce Centre for International Economics
3 Approach Key results
4 Approach Combine theory and data theory suggests broad relationships data gives estimates of the order of magnitude of effects Country level analysis 136 countries added up to give regional results 1996 UNESCO data updated to latest where available supplemented with UN, World Bank and IMF data
5 Education and income Tertiary participation closely related to income For different participation levels, foreign access ratio is related to income
6 Participation and income Participation Income per capita
7 Foreign access ratio and income > to to to to 3000 Number of students per 100k population 3000+
8 Income Tertiary participation X Population Foreign access rate X Total student numbers Attractiveness Market share X Number of foreign students International campus ratio X Foreign students in Australia Students at Australian transnational institutions
9 Total tertiary student numbers 263 m 160 m 97 m 66 m
10 Composition of tertiary students Africa Middle East Asia America Europe Oceania
11 Numbers of foreign students 7.2 m 4.9 m 1.8 m
12 Composition of foreign students Africa Middle East Asia America Europe Oceania
13 Students at Australian institutions 562 k 434 k 68 k 33 k
14 Composition of foreign students in Australia Africa Middle East Asia America Europe Oceania
15 Composition of Asian students in Australia East Asia South East Asia South Asia
16 How robust are the estimates? Look at a wide range of parameter values Generate estimates for many different parameter values Check range of estimates
17 Sensitivity analysis Total students Foreign students Foreign students in Australia Australian international campuses
18 Scenarios Ideal tool for testing different scenarios Three examples: effect of higher income growth the effect of AIDS the effect of changes in preferences for foreign education
19 High income growth: foreign students 2025 ('000) +35% 5, % % % Africa Asia America Europe
20 The effect of AIDS Lower population in key age groups Fewer funds available for education Lower economic growth
21 Effect of AIDS: foreign students in 2025 ('000) 5,004-4 % % Africa Asia
22 New preference for foreign education Hypothesis: some component of foreign education will become important in high participation countries Test importance by altering model parameters increase responsiveness of foreign access rate to income growth
23 Foreign preference: foreign students in 2025 ('000) +8% 5, % % % Africa Asia America Europe
24 Global Student Mobility 2025 Key Implications for the Australian International Education Industry Anthony Bohm, Head, Planning and Research Branch IDP Education Australia
25 In 2025, the global demand for Australian higher education will exceed 996,000 students Some key questions What is the role of Australian universities in meeting the global demand for education? Can Australian universities maintain diversity while meeting the future demand for international education?
26 A quick recap of the global picture: 1.8 million -> 7.2 million Average growth of 5.8% p.a Asia will dominate: 43% -> 70% of demand China & India = 51% of demand New markets = Turkey, Morocco and Iran Europe: 32% -> 13% Americas: 8% -> 4%
27 A quick recap of the Australian picture: Total International Students 102,000 in > 996,000 in 2025 Average students per university: 2,500 -> 23,200 International students > Australian students
28 International Students in Australia Demand from Asia will increase: 83% -> 92% China, Malaysia, India and Indonesia = 62% All top ten markets are in Asia Europe: 8% -> 3% Americas: 6% -> 3% Emergence of new demand drivers Transnational Education Transnational programs: 33% -> 44% Asia will dominant transnational demand (98%) East Asia (49%) and South East Asia (46%)
29 Implication: What is the role of Australian universities in meeting the global demand for international education?
30 Australian economic and political perspective Fulfilment of human and social potential Building a knowledge economy Globally competitive labour force Green sustainable export industry Contributing over $38 billion in 2025 Further integrating Australia within the region Mechanisms for global diplomacy
31 University perspective Can Australian universities not afford to increase their involvement in international education? Increasing cost of quality and excellence Australia has 600,000 domestic higher education students [4% of the population] Higher education participation: Australia [63%], high income countries [60%] Slow population growth: years will increase from 1.35 million to 1.40 million by 2031 International education will drive future growth
32 Australian student perspective Effective engagement in international education provides wide-ranging benefits for Australian students Maintained access to quality and excellence Increased choice within the Australian education Increased access to world leading specialisations Internationalisation of the curriculum Increased recognition of Australian qualifications around the world Increased global mobility of Australian students Improved employment prospects
33 Implication: Can Australian universities maintain diversity and meet the future demand for international education?
34 What do we mean by diversity Diversity refers to the need to obtain a distribution of international students by: Disciplines Levels of study Campuses (regional and transnational) Regions and countries
35 Why do we need diversity Broaden and expand political networks Sustaining the export market -> managing risk Productive diversity -> globally aware graduates Enriching Australian communities Measuring diversity Dominant measures of classroom diversity: %international to domestic students % students by region or country
36 The paradox of diversity. What does diversity mean for students in transnational programs? How do the political, economic, academic and social motivations for diversity apply to transnational programs? Could we see the development of international campuses in Australia?
37 Implications Concepts of diversity will significantly determine Australia s ability to meet the future demand. Possible solution: Grow new markets, do not lose traditional markets BUT requires relatively high share of a small market Warning: If you limit capacity, demand will be met by competitors and institutions will risk losing their core markets Others Asia 93% 80%
38 Implication: A new competitive environment will emerge
39 New competitors will enter the market. Critical question: What will be the role of the private education or corporate sectors in meeting the global demand for international education? What will be the global languages of the future and how will that alter the composition of demand? What will be the role of non-english speaking destination countries in meeting the global demand for international education?
40 A new marketing paradigm. Adams and Walters (2001) Recruitment of students to a network of regional, global and virtual campuses through the creation of innovative international degree products, relationship and technology management Re-evaluate the value-chain: after sales service
41 Implication: International education will fundamentally alter Australian government policy International revenue will outstrip government funding To capitalise on the future demand requires investment in infrastructure now Quality assure the inflow of new entrants in the market, such as corporate universities Facilitate the formal and informal recognition of Australian qualifications around the world Ensure equity and access to higher education
42 Implication: Changing the composition of demand Global demand will no longer be driven by an inability to access local higher education Increased need for labour market differentiation creates higher demand for study abroad Composition of demand will be closely tied to trends in the global labour markets Emerging demand for disciplines in line with new areas of labour demand health care, environment Flexible, just-in-time, shorter education increasing against traditional concepts of university study
43 Implication: Changing the nature of supply In line with the changing composition of demand, so too will the supply response change Fundamentally different industry structure Will we see a breaking down the value chain where universities become global content providers? Universities will seek partnerships for culturally appropriate delivery of global content Long term only those that deliver demonstrated skills and competencies will survive
44 Implication: International education will become an increasingly important element of globalisation
45 Building a global civil society or educational imperialism Global flow of people, capital and knowledge Catalyst for a global civil society Global diplomacy and building global relations Mechanism for economic and political agendas Educational imperialism and power structures Role of reciprocity
46 Australian University of the Future Conglomerate incorporating: Australian university meets the need of the local community and supported by government Corporate university meets the need of the local and international business community International university meets the need of the international communities in which they operate OR Relatively small, centres of higher learning and pure research
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