The shape of international education to 2025

Education Intelligence EI FEATURES The shape of international education to 2025 December 2015 www.britishcouncil.org/education-intelligence

2 Notice Notice This report contains information sourced either by the British Council itself or in collaboration with its research partners and is of a general nature. While the British Council makes every effort to ensure that the information provided in the report is accurate and up to date, the British Council makes no warranty (whether express or implied) and accepts no responsibility for the accuracy or completeness of the report. The British Council does not assume any legal liability, whether direct or indirect, arising in relation to reliance on the report. Any references to third party organisations in this report are not an endorsement by British Council of those organisations.

Contents 3 Contents EXECUTIVE SUMMARY 4 INTRODUCTION Background and scope Methods Report structure 6 6 6 6 GLOBAL FORECASTS Global GDP forecasts Tertiary aged population Demand for tertiary education to 2025 Student mobility to 2025 7 7 12 18 19 WIDER DRIVERS OF INTERNATIONAL EDUCATION Academic factors Economic factors Sociocultural factors Political factors 20 20 23 26 27 CONCLUSION 32

4 Executive summary Executive summary The shape of international education to 2025 examines the landscape of global higher education through the next decade by forecasting demand for higher education based on household wealth and tertiary-aged populations. These projections are supplemented by a study of the academic, economic, sociocultural and political factors that additionally impact student mobility and will shift existing and predicted trends. The British Council worked with Oxford Economics to develop demographic and economic projections, based on data from the UN Population Division and OECD. Forecasts used in this study are based on a sample of the 50+ largest higher education markets from a domestic enrolment and outbound mobility perspective. Key findings Based on household wealth and population projections, China and India will continue to be the top suppliers of international students globally According to British Council projections, in 2025 China will continue to be the number one supplier of international students globally, followed by India, Nigeria, Germany and Saudi Arabia. Also sending large numbers of students abroad will be France, Turkey, South Korea and Pakistan. Global economic growth to 2025 will be driven by Asia Short-term global economic growth will be largely driven by growth in China, India and the ASEAN-5 (Indonesia, Malaysia, Philippines, Thailand and Vietnam) and also by Sub-Saharan Africa and the Middle East, North Africa, Afghanistan, and Pakistan region. Growth in the global middle class, those with household consumption of US$10 to US$100, will be driven by expansion in Asia, specifically China, India, Indonesia, Vietnam, Thailand and Malaysia. By 2030, the global middle class will rise to 4.9 billion, from 1.7 billion in 2011, two thirds of which will be from the Asia-Pacific region. Projections indicate that Sri Lanka will see the highest annual percentage growth in household income over the next decade, at 5.8 per cent per annum. Strong average annual growth is also forecasted to come from Vietnam (5.5%), India (5.3%), Uzbekistan (5.3%), China (5.1%), Bangladesh (4.7%) and Indonesia (4.3%). Global population growth to 2025 will be driven by India, Indonesia and Africa The countries from which there will be the highest number of appropriately-aged students for tertiary study abroad will potentially house the largest demand for higher education. According to forecasts, China s 18 to 22 year old population is projected to decline roughly 35 million people to 80 million in 2025 from 115 million in 2012; Nigeria will see the highest increase in this youth population, projected at about 7.4 million from 16 million in 2012 to 23 million 2025. Other countries that will have much bigger tertiary-aged populations over the next ten years include India (+3.9 million to 119 million in 2025), Indonesia (+3.7 million to 24 million) and Ethiopia (+3.6 million to 13 million). By 2025 India will have the largest 18 to 22 year old population, followed by China, Indonesia, Nigeria, the US, Pakistan, Brazil, Bangladesh, Ethiopia, the Philippines and Russia. The African youth population is set to equal, and then surpass, the Asian youth population around 2078.

Executive summary 5 Local provision is expanding globally and new hosts are emerging Domestic provision of high quality education is increasing in emerging destination markets, leading to more students from those countries choosing to stay for tertiary education and international students being attracted to those destinations. By 2025 India will be home to the largest domestic higher education market, followed by China and the US. There will also be strong growth in demand for higher education in Brazil and Indonesia. Despite experiencing growth in their tertiary enrolment rates a host of countries including Russia, South Korea, Germany, Italy and Japan are forecast to experience declines in tertiary enrolment levels due to weak demographic projections between 2012 and 2025. As a result, many of these countries have implemented national policies to promote international education. Numerous countries have implemented policies to promote inbound mobility: while China continues to attract high numbers of students from rising origin countries India and Indonesia, Japan hopes to attract 300,000 international students by 2020 and Korea looks to enrol 200,000 foreign students by 2023. Intra-regional mobility increasing alongside current mobility flows Regional initiatives (e.g. ASEAN Common Space of Higher Education in Southeast Asia) are also pushing forward the student mobility and knowledge transfer agenda. The percentage of students from Arab states that studied abroad within the region increased from 12 per cent in 1999 to 26 per cent in 2012 and the percentage of Asian students staying in the region for tertiary education increased from 36 per cent in 1999 to 42 per cent in 2007. UK market share may continue to decrease Despite attracting the highest numbers of international students, the US and the UK have seen decreases in their global market share of international students and as provision of education in traditional origin countries increases, this trend looks to continue. A diversity of factors will continue to directly impact the landscape of international education over the next decade The nature of mobility is becoming more complex and, as such, it is becoming more difficult to track. Transnational education models continue to develop and in the future, most students will have an international component to their course. Fluctuations in exchange rates impact not only individual decision-making, but also policy, and if a country s currency depreciates significantly against the currency of the main destination markets for its outbound students, the outbound mobility ratio declines. Language will continue to play an important part in student flows not only by influencing rankings and student decision-making but also by creating new patterns of mobility. Students are choosing host destinations based on not only the high quality of education but the market opportunities that the destination will be able to offer. In conclusion As education markets in Asia strengthen and as African markets flourish, diversification in internationalisation strategies is essential. Crucial to this planning is a comprehensive understanding of the underlying drivers of mobility, especially as international education is becoming more complex and as markets and models of provision continue to develop. Understanding how these factors work together to form the whole allow us to better project and prepare for the future landscape of international education to 2025.

6 Introduction Introduction Background and scope As the global higher education sector continues to grow, it is becoming increasingly complex and multi-faceted, affecting and being affected by numerous domains. The interconnected nature of education has made it more difficult to predict the future of this market, which is now integral to the economic prosperity of not only institutions, but nations. Demographic and economic projections are conservative indicators of mobility and they continue to provide us with evidence to better understand the possible landscape of international education in the short- and mediumterm. However, dependence on these factors alone to inform the big picture makes us vulnerable to unexpected local and global changes. As such, it is imperative that we look at other factors impacting student mobility in our studies of what the future holds. In this report we build upon the British Council s past forecasting reports by projecting household wealth and 18 to 22 year olds to better understand the prospects for student mobility to 2025. However, we recognize that these projections are incomplete without taking into consideration the myriad of other drivers that affect student mobility. Therefore, in this year s work we continue on to detail the political, economic, sociocultural and academic factors that will impact student mobility. By understanding these factors and the risks they pose, we can better develop mechanisms to prepare for the next decade in international education. Methods The economic and demographic forecasts included in this work were based on the latest OECD and UN Population Division figures available at the time of the research and were provided in partnership with Oxford Economics. The analysis of tertiary demand is based on the higher education level, including International Standard Classification of Education (ISCED) levels five and above. The focus of this research is global. However, to avoid analysing small countries with marginal opportunities due to their limited critical mass a shortlist of the top 50+ largest higher education countries was identified for forecasting purposes. Comparable inbound international student data from specific countries, including China, Singapore and Malaysia, are not available and therefore were not included in the analysis. Report structure This report is divided into four main sections. The first section introduces the work and details the methods used for the projections used in the research. The second section presents both British Council and other forecasts for wealth and youth demographics and discusses the impact of these projections on future demand for tertiary education and student mobility. The third section outlines the wider, unpredictable drivers of international education, organised by academic, economic, sociocultural and political factors. The last section concludes with a summary of the key messages from the research.

Global forecasts 7 Global forecasts The British Council s The shape of things to come: higher education global trends and emerging opportunities to 2020 in 2012, followed by The future of the world s mobile students to 2024 in 2013, and Postgraduate student mobility trends to 2024 in 2014, looked at the effects of global wealth and youth population to better understand potential markets of interest over the next decade. We continue this exercise to 2025 in this year s research. Global GDP forecasts Table 1: Global annual GDP growth projections (%) 2013 2014 2015 (f) 2016 (f) World Output 3.4 3.4 3.3 3.8 Advanced Economies 1.4 1.8 2.1 2.4 United States 2.2 2.4 2.5 3 Euro Area -0.4 0.8 1.5 1.7 Japan 1.6-0.1 0.8 1.2 United Kingdom 1.7 2.9 2.4 2.2 Canada 2 2.4 1.5 2.1 Other Advanced Economies 2.2 2.8 2.7 3.1 Emerging Market and Developing Economies 5 4.6 4.2 4.7 Commonwealth of Independent States 2.2 1-2.2 1.2 Emerging and Developing Asia 7 6.8 6.6 6.4 Emerging and Developing Europe 2.9 2.8 2.9 2.9 Latin America and the Caribbean 2.9 1.3 0.5 1.7 Middle East, North Africa, Afghanistan, and Pakistan 2.4 2.7 2.6 3.8 Sub-Saharan Africa 5.2 5 4.4 5.1 Source: International Monetary Fund After a global recession in 2008 and 2009, the global economy is getting back on track. International Monetary Fund (IMF) projections as of July 2015 indicate that 2015 will end with 3.3 per cent growth in global GDP, slightly down from 3.4 per cent in 2014 and 2013. It predicts that growth will pick up again in 2016, driven largely by countries in Asia including China, which is forecasted to grow at 6.8% and 3.6% in 2015 and 2016, respectively, India (7.5% projected growth in 2015 and 2016) and the ASEAN-5. The ASEAN-5 is made up of Indonesia, Malaysia, Philippines, Thailand and Vietnam, and is projected to grow at 4.7 and 5.1 per cent in 2015 and 2016 respectively. It is worth noting that there have been concerns recently regarding the recent slowdown in the Chinese economy and its effects on national and global short-term growth. Other areas of the world that will drive global growth include Sub-Saharan Africa, including Nigeria which is forecast to grow at 4.5 and five per cent in 2015 and 2016 respectively, and the Middle East, North Africa, Afghanistan, and Pakistan region.1 One of the most direct impacts on student mobility is household income. Wealth is directly correlated to domestic tertiary enrolment ratios, an increase in which leads to greater numbers of students interested in pursuing overseas study. As household incomes and the number people in the middle class - rise globally, families are more able to afford international education. While the growth of the middle class is a global phenomenon, much like the growth in global GDP, it is being 1 International Monetary Fund, World Economic Outlook Update, Julyy 2015. http://www.imf.org/external/pubs/ft/weo/2015/update/02

8 Global forecasts driven by change in a few particular regions. Estimates of the size of the global middle class differ for a number of reasons, including the varying definitions of what constitutes the middle class. Most evaluations placed the number of middle class people globally at around just below two billion in 2009 and the OECD states that using the consumption range of US $10 to $100 daily, there were roughly 1.7 billion middle class individuals in 2011. This number is projected to grow to 3.2 billion in 2020 and 4.9 billion in 2030.2 It is important to note the definition of middle class in this instance, as it includes those who have just been able to cover basic necessities of shelter and food and are now able to invest in education, healthcare and limited luxuries such personal electronics. Figure 1: Global middle class projections (millions) 3 500 3 000 2 500 2 000 1 500 1 000 500 North America Europe 2009 Central and South America 2020 Asia Pacific Sub-Saharan Middle East and Africa North Africa 2030 Source: OECD The most rapid expansion in the middle class is being witnessed in Asia, and specifically in China, India, Indonesia, Vietnam, Thailand, and Malaysia.3 In fact, by 2030, Ernst and Young projects that two of every three middle class people will be from Asia Pacific and that one billion people in China will qualify as middle class. This is staggering compared to other countries, including the fast-developing India, which is projected to house 200 million middle class citizens by 2020.4 Fourteen per cent of the global middle class is projected to be in Europe in 2030, and less than ten per cent will be from North America (7%), Central and South America (6%), Middle East and North Africa (5%) and Sub-Saharan Africa (2%).5 Europe and North America are the only two regions that are projected to see decreases in their middle-class populations. To better understand specific markets that are home to rising household wealth, the British Council in partnership with Oxford Economics forecasted annual growth in GDP per capita (PPP) by country to 2025. 2 3 4 _ 5 Homi Kharas, The Emerging Middle Class in Developing Countries, OECD Development Centre, January 2010. http://www.oecd.org/dev/44457738.pdf Reuters, The Swelling Middle, 2012. http://www.reuters.com/middle-class-infographic Ernst & Young, Middle class growth in emerging markets: A changing world. http://www.ey.com/gl/en/issues/driving-growth/middle-class-growth-in-emerging-markets---a-changing-world Homi Kharas, The Emerging Middle Class in Developing Countries, OECD Development Centre, January 2010. http://www.oecd.org/dev/44457738.pdf

Global forecasts 9 Figure 2: Annual average growth, 2012-2025, GDP per capita (PPP) 4% 2% Egypt 3.5% Philippines 3.5% Romania 3.6% Belarus 3.6% Morocco 3.7% Pakistan 3.7% 6% 3.8% Mauritius 3.9% Kazakhstan Ethiopia 4.0% Ukraine 4.3% Indonesia 4.3% Bangladesh 4.7% China 5.1% Uzbekistan 5.3% India 5.3% Vietnam 5.5% Sri Lanka 5.8% Source: British Council, OIC Similar to IMF estimates for global GDP growth, Oxford Economics projections indicate strong growth from Asia in the coming years. Sri Lanka is forecasted to see the highest annual percentage growth in household income over the next decade, at 5.8 per cent per annum. Strong average annual growth to 2025 is also forecasted to come from Vietnam (5.5%), India (5.3%), Uzbekistan (5.3%), China (5.1%), Bangladesh (4.7%) and Indonesia (4.3%); China has recently seen a downturn in its economy that may negatively affect these projections. It is anticipated that these strong rates of economic growth will drive significant growth in the tertiary enrolment rates within each of these countries over the next decade. Developed Western economies including Italy (0.8%), France (1.1%), Canada (1.2%), Germany (1.3%), the US (1.8%) and the UK (1.8%) are also forecast to experience moderate growth in GDP per capita to 2025. The relationship between domestic tertiary enrolments and GDP per capita (PPP) is strong up to US$10,000 and for increases in wealth below that benchmark, there are substantial positive effects on enrolments. Generally, nations with household wealth at about US$10,000 have gross tertiary enrolment ratios of about 40 per cent. Increases in wealth above this level still do correlate to increases in tertiary enrolments, but the effects are less marked. This means that those countries that are below and approaching the US$10,000 income level have a very high potential for growth in tertiary enrolments over the next decade.6 6 British Council, The shape of things to come: Higher education global trends and emerging opportunities to 2020, 2012. https://www.britishcouncil.org/sites/default/files/the_shape_of_things_to_come_-_higher_education_global_trends_and_emerging_opportunities_to_2020.pdf

10 Global forecasts Figure 3: Projected GDP per capita (PPP), selected countries 20 000 15 000 10 000 5 000 2000 2005 2010 2015 2020 2025 China Sri Lanka Colombia Indonesia Egypt Jordan Ukraine Morocco Angola Uzbekistan India Philippines Vietnam Kenya Nepal Ethiopia Zimbabwe Source: British Council The British Council looked at a sample of countries that are approaching or have recently passed the US$10,000 GDP per capita (PPP) benchmark. Many of the countries that are experiencing strong growth in GDP overall and in the middle class are economically well-positioned for strong growth in their tertiary enrolments and therefore outbound student numbers. These include China, Colombia, Egypt, Jordan, Indonesia and Sri Lanka. Countries that are projected to reach the US$10,000 benchmark in the next ten years include Ukraine, Angola and Morocco. Other countries, including India, Vietnam and Pakistan, will see strong growth and push forward global economic progress but will not reach the benchmark of US$10,000 by 2025, indicating possibilities for substantial growth in the subsequent ten years as well.

Global forecasts 11 Figure 4: Spending by the global middle class (millions of 2005 PPP dollars) 100% 23% Middle East and North Africa 80% 42% 59% 60% Sub-Saharan Africa Asia Pacific 38% Central and South America 40% Europe 29% 20% 20% North America 26% 17% 10% 2009 2020 2030 Source: OCED As of 2009, just 23 per cent of global middle class spending came from Asia, but this is projected to grow to 59 per cent in 2030, whereas spending from Europe and North America is set to decrease from 26 to ten per cent and 38 to 20 per cent, respectively.7 Consumer and spending patterns range but generally, those who have entered the middle class prioritise education, and high-quality education if they can afford it. However, despite the strong purchasing power and expanded income from this stratum of people, they will remain highly pricesensitive to education options. This may be in part because their savings are smaller and they are therefore more reliant on recent income to cover the costs of education. 7 Homi Kharas, The Emerging Middle Class in Developing Countries, OECD Development Centre, January 2010. http://www.oecd.org/dev/44457738.pdf

12 Global forecasts Tertiary-aged population One of the most direct impacts on global student mobility is the size of the tertiary-aged population. Simply put, the more 18 to 22 years olds there are, the more will want to study abroad. As such, and due to the fact that this population s size can be easily predicted with a high degree of accuracy, it is imperative we examine this group to see how it will grow, and in what areas it will affect the most change. Figure 5: Global population prospects 12 000 000 10 000 000 Oceania 8 000 000 6 000 000 Northern America Latin America and the Caribbean Europe 4 000 000 Asia Africa 2 000 000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 Source: UN Population Division Currently, the world s population is 7.3 billion and is projected to rise to 8.5 billion in 2030 and about 11.2 billion in 2100; according to the UN Population Division, there is a 95 per cent chance that the global population in 2100 will be between 9.5 and 13.3 billion. It is most interesting to see how the shares of the global population will change geographically; currently about 60 per cent of the global population is in Asia, 16 per cent in Africa, ten per cent in Europe, nine per cent in Latin America and the Caribbean and five per cent in Northern America and Oceania. Just as short-term growth in global GDP will come from Asia, growth in the global population to 2100 will come from Africa; just over 50 per cent of the population growth that will occur in the next 85 years will come from Africa. By 2100, numerous African countries including Angola, Malawi, Somalia, Uganda and Tanzania are projected to increase their population fivefold. On a shorter-term scale, to 2050, half of global growth will come from India, Nigeria, Pakistan, the Democratic Republic of Congo, Ethiopia, Tanzania, the US, Indonesia and Uganda.8 8 UN Population Division

Global forecasts 13 Figure 6: Global youth population projections 800 000 000 Asia 600 000 000 Africa Latin America and the Caribbean Europe 400 000 000 Northern America Oceania 200 000 000 2000 2015 2025 2050 2075 2100 Source: UN Population Division We are able to understand more about how the global population prospects affect tertiary education when we look at the projected growth in 15 to 24 year olds globally. While European as well as Latin American and Caribbean youth populations are forecast to decline slightly through the century, the real movement comes from the Asian and African populations; the Asian 15 to 24 year old population, largely driven by the ebb and flow of the Chinese youth population, will fall and rise and then is ultimately projected to decrease to 2100. Countering this is a massive population boom in Africa. The African youth population is set to equal, and then surpass, the Asian youth population around 2078.

14 Global forecasts Figure 7: 18 to 22 year old population projections, selected countries 510 000 000 World 470 000 000 430 000 000 390 000 000 World excluding China 350 000 000 2000 2005 2010 2015 2020 2025 Source: UN Population Division, British Council The British Council and Oxford Economics undertook shorter-term forecasts, taking into account 56 key countries, and found that the 18 to 22 year told population will decrease to 2020, when it will begin to rise again. It is interesting to note that the trend changes, and rises on a steady trajectory, when we look at the global sample of countries without the influence of China s currently declining 18 to 22 year old population. According to forecasts, China s 18 to 22 year old population is projected to decline 35 million people from 2012 to 2025 (yet will still see growth in demand for tertiary education). However, just as China s downward population trend weighs down global growth, flourishing youth populations in other countries are supporting it.

Global forecasts 15 Table 2: Top ten fastest growing and declining 18 to 22 year old populations (000s) Top ten fastest growing 18-22 populations 18-22 population 18-22 population Change 2012 2025 2012-25 Nigeria 15 759 23 333 7 474 India 115 489 119 451 3 962 Indonesia 20 403 24 064 3 661 Ethiopia 9 318 12 910 3 592 Kenya 4 275 5 945 1 670 Philippines 9 469 10 993 1 524 Iraq 3 222 4 443 1 221 Angola 1 977 3 126 1 149 Pakistan 18 995 19 663 668 Ghana 2 515 3 142 628 Top ten fastest declining 18-22 populations 18-22 population 18-22 population Change 2012 2025 2012-25 Poland 2 555 1 833-721 Japan 6 298 5 570-729 Thailand 4 663 3 909-754 Germany 4 550 3 708-843 South Korea 3 331 2 407-923 Ukraine 3 054 2 066-988 Iran 7 566 5 844-1 721 Vietnam 8 739 6 845-1 894 Russia 9 868 7 547-2 321 China 115 560 80 388-35 171 Source: UN Population Division, British Council Nigeria is projected to see the highest increase in its youth population, projected to grow by about 7.4 million from 2012 to 2025. Other countries that will have much bigger tertiary-aged populations over the next ten years include India (+3.9 million), Indonesia (+3.7 million) and Ethiopia (+3.6 million). Five of the top ten fastest-growing 18-22 year old populations in our study were in Africa. While not declining as rapidly as China, countries with decreasing youth populations from 2012 to 2025 include Russia (-2.3 million), Vietnam (-1.9 million) and Iran (-1.7 million). Half of the top ten fastest declining 18 to 22 year old populations is from East Asia, and some are from countries that are seeing rapidly advancing economies.

16 Global forecasts Figure 8: Distribution of 18 to 22 year old population, 2012 (000s) a re 5 Ko 95 h 3 ut ce 4 So ran 99 F K3 U 1 33 Egypt Other shortlisted countries 3 K Co eny Ge lom a 4 Th rm bia 275 a a So ilan n 4 4 2 uth d 55 81 Jap A 46 0 an fric 63 a 62 Tur 98 5 02 key 6 63 14 Iran 75 China 54 104 115 560 66 7 636 Vietnam 8 739 Ethiopia 9 318 s 9 469 Philippine 68 ia 9 8 Russ ico Mex 11 India 010 sh de 15 la ng Ba 9 45 115 489 9 ia er g Ni 15 75 Brazil 16 718 Pakistan 18 995 Indonesia 20 403 US 22 174 Source: UN Population Division Note: The other shortlisted countries category includes 31 individually small markets

Global forecasts 17 Figure 9: Projected distribution of 18 to 22 year old population, 2025 (000s) 9 y 90 an rm 833 3 Ge 3 and UK hail T Other shortlisted countries 3 Fr Co anc Ira lom e 4 So q 4 4 bia 040 u 4 4 Ja th A 3 383 pa f r n 5 ica Ira 57 50 n5 0 26 844 Ken ya 5 945 Turk ey 6 327 Vietna m6 8 70 49 214 India 119 451 845 Russia 7 547 Egypt 8 226 Philippin ico Mex E th es 10 993 China 56 11 3 iop ia n Ba 12 910 d gla 80 388 82 h es 2 15 Brazil 16 222 Pakistan 19 663 US 22 243 Indonesia Nigeria 24 064 23 233 Source: UN Population Division, British Council Note: The other shortlisted countries category includes 31 individually small markets

18 Global forecasts According to forecasts by, 2025 India will have the largest 18 to 22 year old population, followed by China, Indonesia, Nigeria, the US, Pakistan, Brazil, Bangladesh, Ethiopia, the Philippines and Russia. Taking into account the variety of other factors affecting student mobility, these are the countries from which there will be the highest number of prospective students for tertiary study abroad and therefore potentially the largest demand for higher education. These markets, therefore, are not only crucial in terms of student mobility but also international partnerships and engagement. Demand for tertiary education to 2025 Figure 10: Projected demand for tertiary education, 2012-2025 45000 India China 30000 US 15000 Indonesia Brazil Russia 2000 2005 2010 2015 2020 2025 Source: British Council Table 3: Top ten domestic tertiary education markets, 2012 and 2025 2012 2025 China India India China US US Russia Indonesia Brazil Brazil Indonesia Russia Iran Turkey Turkey Nigeria Japan Mexico South Korea Iran Source: British Council Taking into consideration trends in tertiary education, the number of 18 to 22 year olds and household wealth, the British Council projects that by 2025 India will be home to the largest domestic higher education market, followed by China and the US. Also seeing strong growth in demand will be Brazil and Indonesia as well as Nigeria and Mexico.

Global forecasts 19 Table 4: Top highest projected annual average enrolment growth in tertiary education markets, 2012-2025 Ethiopia 10.1% Angola 7.9% Kenya 6.8% Nigeria 5.7% Pakistan 5.0% Ghana 5.0% Nepal 4.2% Iraq 4.2% Indonesia 3.9% Sri Lanka 3.8% India 3.4% Saudi Arabia 3.1% Source: British Council The highest rates of growth are forecast to come from Asia and Africa. From 2012 to 2025 the British Council estimates an increase in local enrolments in tertiary education of 3.4 per cent annual average in India and 5.7 per cent in Nigeria, but other countries have much higher anticipated growth rates. Angola is forecast to have 7.9 per cent annual average growth in tertiary enrolments, albeit from a much smaller base as compared to India and Nigeria. Ethiopia s enrolled university population is projected to grow at 10.1 per cent on average per year and Kenya s at 6.8 per cent. South Asian countries including Pakistan (five per cent average increase per year to 2025) and Sri Lanka (3.8%) also will see increased interest in higher education. Student mobility to 2025 The British Council predicts that despite slowed growth from China, it will continue to be the number one supplier of international students globally, followed by India, Nigeria, Germany and Saudi Arabia. Also sending large numbers of students abroad will be France, Turkey, and Pakistan. This group of countries will not only provide opportunities over the next decade for student mobility but international collaborations and engagement. Further, the traditional host destinations of the US, UK, Australia, Germany and Canada according to available data will continue to welcome the highest number of students. These projections, however, do not provide a complete picture. While the countries with the highest number of tertiary-aged citizens and rising wealth will undoubtedly supply a large number of internationally mobile students, demand for international education will also come from less traditional origin countries. The demographic growth in Sub-Saharan Africa coupled with government goals in a number of these countries, Ethiopia as an example, to reach middle-income status by 2025 indicates that it is a fast-growing area of interest; the British Council predicts that the demand for higher education in Ethiopia will grow on average annually about ten per cent to 2025. Other African countries will see smaller but still significant growth, including Tanzania, Uganda and Mozambique. Other changing considerations include the rising regional and transnational hubs that are attracting students and disrupting traditional student flows to English-speaking destinations as well as a growing demand for credit mobility. Complex pathways, such as those through TNE programmes, further add to the complexity of today s international education landscape. An understanding of these drivers, and numerous other factors, that influence student decision-making and the shape of international education, is essential prior to making investment and recruitment decisions.

20 Wider drivers of international education Wider drivers of international education So what are the wider drivers of international education and how do they affect global flows of students? In 2013, we published a study entitled Megatrends: The future of international education, which looked at this issue and presented seven separate factors that influence flows. In this work, we dive deeper into the academic, economic, sociocultural and political issues that affect international student mobility and examine how they may shift existing and predicted patterns. Academic factors Local provision Local provision of education plays a pivotal role in student mobility patterns; it acts both as a push, when local supply of high-quality education cannot meet demand, and a pull, attracting international students when its teaching and learning are well-reputed.9,10 All else being equal, students from countries with local provision that does not meet demand in terms of quantity and/or quality study abroad in higher percentages. Domestic provision of high quality education is increasing in emerging destination markets, so students from those countries will increasingly choose to stay for tertiary education, but international students will be attracted to those destinations; this leads to an inevitable shift in global market shares of international students.11 The British Council, based on the most recent OECD data, projected the shape of local demand for tertiary education to 2025. According to forecasts, driven by strong projected demographics and an increase in its tertiary enrolment rate, India will be home to the largest university student population, followed by China, the US, Indonesia, Brazil, Russia, Turkey, Nigeria and Mexico. What is interesting about these countries, however, is that while China and India still have the wealth and youth population to continue sending students abroad in large numbers, the increased provision in countries like Brazil and Indonesia may start to meet the current local overdemand for higher education. Further, at some point after 2025, India and China are projected to meet demand themselves.12 Despite experiencing growth in their tertiary enrolment rates a host of countries including Russia, South Korea, Germany, Italy and Japan are forecast to experience declines in tertiary enrolment levels due to weak demographic projections between 2012 and 2025. Even though they attract the highest numbers of international students, the US and the UK have seen decreases in their global market share of international students and as provision of education in traditional origin countries increases, this trend will inevitably continue. While there is not comparable data coming out of China with regards to its international student population, the Chinese Service Center for Scholarly Exchange (CSCSE) states that the Indonesian student enrolments in China have increased annually by ten percent over the last five years. This means that not only is China competing for a country that traditionally has sent students to the US and UK, but one that is forecast to see immense growth in 18 to 22 year olds and household wealth in the near future.13 Russia s Project 5/100 plan outlines the nation s goals of seeing five Russian universities in the top 100 rankings Karen MacGregor, The shifting sands of international student mobility, University World News, 12 September 2014. http://www.universityworldnews.com/article.php?story=20140912112348627 10 University of Chester, Trends in Global Student Mobility: The Impact of UK immigration policy on International student recruitment to the UK, 21 January 2015. http://www.chester.ac.uk/node/28448 11 Maia Chankseliani, On Student Mobility From Post-Soviet Countries, June 22, 2015. http://www.openpop.org/?p=1133 12 ICEF Monitor, Four trends that are shaping the future of global student mobility, 2 September 2015. http://monitor.icef.com/2015/09/four-trends-that-are-shaping-the-future-of-global-student-mobility/ 13 ICEF Monitor, Is Asia ready to be the next higher education superpower?, 10 June 2015. http://monitor.icef.com/2015/06/is-asia-ready-to-be-the-next-higher-education-superpower/ 9

Wider drivers of international education 21 by 2020 and bringing in higher numbers of academics and students from outside its borders.14 Again, as Russia has a shared history and languages with a number of countries in the region, local provision could be an attractive proposition for students in post-soviet states, some of which are seeing strong growth in personal wealth, looking to study abroad. Numerous other countries have set lofty targets for international students: Japan hopes to attract 300,000 international students by 2020 and Korea looks to enrol 200,000 foreign students by 2023. Local provision of this kind is not only a challenge, however, but also an opportunity for engagement. For example, China s Tsinghua University is partnering with the University of Washington and with the support of Microsoft, is launching a programme for postgraduates in technology; the group has stated they are open to more partners.15 Regional mobility initiatives Adding to the expansion of local provision is a number of regional partnerships aimed to increase the number of students who study abroad within the same region; this has begun to change patterns of mobility globally and will continue to influence trends over the next decade and beyond. According to UNESCO, the percentage of students from Arab states that studied abroad within the region increased from 12 per cent in 1999 to 26 per cent in 2012 and Dubai now follows the US and France as the third most popular destination for students in the area.16 Similarly, the share of Latin American students who studied abroad in their own region was 11 per cent in 1999 and was 23 per cent in 2007.17 Figure 11: Percentage of mobile students studying in another country in the same region, 2009 10% 20% 30% 40% 50% 60% 70% 80% Western Europe SADC East Asia and the Pacific North America Central and Eastern Europe Latin America and the Caribbean Sub-saharan Africa Central Asia Arab States Non-SADC Sub-Saharan Africa South and West Asia Source: UNESCO Institute for Statistics database As of 2009, one half of students from the Southern African Development Community (SADC) countries, including burgeoning economies Angola and Botswana, stayed in their sub-region for higher education. The community developed a Protocol on Education and Training, which aimed to promote cooperation and regionalism to, in part, increase skills and decrease brain drain in the area.18 According to UNESCO, many of the students in this region HERB: Higher Education In Russia and Beyond, Making Way to Global University Rankings: Russian Master Plan, 2014. http://www.hse.ru/data/2014/05/16/1321296879/herb_01_spring.pdf 15 Dina Bass and Tim Culpan, Microsoft Funds University of Washington, Tsinghua Tech Program, Bloomberg Business, 19 June 2015. http://www.bloomberg.com/news/articles/2015-06-18/microsoft-funds-university-of-washington-tsinghua-tech-program 16 UNESCO Institute for Statistics, Global Flow of Tertiary Students. http://www.uis.unesco.org/education/pages/international-student-flow-viz.aspx 17 ICEF Monitor, Four trends that are shaping the future of global student mobility, 2 September 2015. http://monitor.icef.com/2015/09/four-trends-that-are-shaping-the-future-of-global-student-mobility/ 18 Southern African Development Community, Education and Skills Development. http://www.sadc.int/themes/social-human-development/education-skills-development/ 14

22 Wider drivers of international education choose to study in the member state of South Africa. Much has been published about Asian regional student mobility and the rise to prominence of Asian countries as destination markets for outbound students has important implications. As many countries continue to be viable origin destinations either due to advancing economies or booming youth populations or both the increased regional choices do play a part in decision-making. The percentage of Asian students staying in the region for tertiary education increased from 36 per cent in 1999 to 42 per cent in 2007. While much attention is given to individual destinations China, as an example, is known for comptition amongst domestic institutions and proliferation of international programmes, and has tripled the number of international students from 2004 to 201319 - regional initiatives are also pushing forward the agenda of Asian destination markets. As the ASEAN economic community comes together, great emphasis has been placed on the development of higher education. Through the development of the Common Space of Higher Education in Southeast Asia, eleven governments aim to integrate higher education in the region through standardised credit transfers and quality as well as increased partnerships and student mobility.20 Changing models of delivery The proliferation of models of delivery continues to change the face of international higher education. Moving into the next ten years, models of provision will continue to diversify and, increasingly, higher education programmes will all have a pivotal international component. Current cases of transnational education and the use of digital mediums show how the sector continues to grow and transform with student needs. Transnational education has been changing traditional mobility patterns. A number of countries the UAE and Malaysia as two examples are well known for incorporating partnerships as a way to attract students and improve higher education provision in-country. Another case is that of Kazakhstan, where partnerships between Nazarbayev University and leading universities globally are setting a blueprint for the rest of the universities in-country to follow. From another perspective, TNE partnerships are a way for destination countries, such as Australia and the UK, to continue to cater to international students when there is little capacity to continue to recruit students to the country itself. As nations continue to invest in offshore provision, traditional models of partnership and engagement continue to develop. Driving many of these developments are advances in digital technologies. Technology has, throughout time, been used to provide education to those who are unable to physically travel to obtain it. Whether technology is viewed as a complement to traditional delivery or a delivery method in itself, it is an integrated part of education offerings and must be considered as a driver in student decision-making. Information is transferred in today s society via a number of digital mediums: students can learn through MOOCs, citizens can up-skill via podcasts, people can stay updated via links on their Facebook feed. No longer is the university the sole font of knowledge, conferring facts on their attentive students. The Guardian recently examined the phenomenon of flipped classrooms, in which students listen to lectures at home and then use face-to-face class time for discussion and analysis. The notion that a student need be physically present in this digital world to interact and learn is quickly becoming antiquated. Some education professionals have suggested that moving into the future, digital education will allow students to unbundle their programmes so that they would be able to take certain modules towards a degree in different places, using digital technologies, in order to build towards their final qualification. Questions persist, however about what this means for the way education is delivered and what the implications may be for teaching and learning. Further, how does this impact the student journey and the international experience, which has an integral part of skill-building in today s marketplace? 19 20 Grant Watson, Beyond China: sustaining future education markets, Presentation, October 2015, Australian International Education Conference. http://aiec.idp.com/topmenu/past-conferences/aiec2015-past/aiec2015-past_1072#sthash.dtwvhrtd.dpuf SEAMEO RIHED, Raising Awareness: Exploring the Ideas of Creating a Common Space in Higher Education in South-East Asia A Conference Proceeding, 2009. http://www.rihed.seameo.org/wp-content/uploads/other_reports/raising_awareness_sea-he_common_space_feb2009.pdf

Wider drivers of international education 23 Perceived reputation and quality of education The quality of education and the international verifiability of a degree comprise two of the most important considerations when a student is thinking about studying abroad, as well as university reputation. Regardless of their wealth and opportunities, students will hesitate to consider options that they do not see as having a higher quality and return on investment than universities and programmes in their own country. As a result of this phenomenon, many students turn to international rankings to better understand an institution s standing and will choose accordingly; governments also use rankings to ascertain which students will receive scholarships. For example, some countries offer funding for students only if the student has already been accepted to a university that ranks in the top 100 in the world. However, there is anecdotally little understanding among students and parents about what rankings actually represent and as s result students may not be making the best choices based on these league tables. Many rankings heavily prioritise self-reported factors including research output and collaboration as opposed to focusing on student-based outcomes or quality of the experience.21 There are conversations currently ongoing regarding the changing of methods in order to make rankings more equitable; as it stands, the rankings aren t an accurate portrayal of the excellence of the education itself. For example, those countries that do not publish in English are at a distinct disadvantage in some rankings, and as a result may not have their exemplary universities in the top tier. This then leads to talented students perhaps considering giving less consideration to the university, or governments abroad not funding students to attend said university. As long as rankings continue to be a strong influencing factor in decision-making, it is important to better education the public and students in particular on what they actually represent. Economic factors Economic stability is an integral part of the international student mobility system. Simply put, students have to be able to afford education abroad and be confident that they will obtain a positive return on investment. Economic factors, inclusive of household wealth, inflation and exchange rates and unemployment as well as underemployment, play an influential role in international student mobility. We have witnessed in the past how instability in markets and turbulent global economic conditions can positively affect the tertiary enrolment rate, and therefore the number of students who study abroad.22 Economic factors, including and alongside household wealth, therefore are vital in forecasting exercises due to their impacts on mobility. Cost of education Tuition costs have increased globally in years past. While a number of European countries are attractive destination markets for students based in part on their affordable costs, increasing fees in the UK, Australia and the US have led to some students looking elsewhere for high-quality education. As countries like China and Japan invest in aggressive policies to increase inbound mobility, their comparatively low price tags have not gone unnoticed by prospective international students. However, the OECD has stated that higher tuitions may not always lead to lowered enrolments if the quality of education is perceived to be high enough to offset its price. 21 22 John Tierney, Your Annual Reminder to Ignore the U.S. News & World Report College Rankings, The Atlantic, September 10, 2013. http://www.theatlantic.com/education/archive/2013/09/your-annual-reminder-to-ignore-the-em-us-news-world-report-em-college-rankings/279103/ The Economist, It still pays to study, 10 September 2010. http://www.economist.com/node/14428647?_sm_au_=ivvztwlwhnplz2pn

24 Wider drivers of international education Figure 12: Estimated annual cost of one year of undergraduate education (US$) Annual university fees Australia 5 000 10 000 15 000 20 000 Annual cost of living 25 000 30 000 35 000 40 000 Singapore United States United Kingdom Hong Kong Canada France Malaysia Indonesia Brazil Taiwan Turkey China Mexico India Source: HSBC Note: HSBC collected costs based on tuition fees for the top ten universities in each country as well as cost of living estimates from online site Expatistan. HSBC compared overall tuition, inclusive of living costs, for top universities in major host destinations and it is readily apparent that destinations including Turkey and China are highly competitive when it comes to costs.23 It is worth noting that while different sources estimate costs differently some assess Australia s costs as much higher and when comparing public undergraduate courses, the UK is more expensive than the US24 China remains a very inexpensive option. As the nation continues to expand the scope and quality of its local Englishlanguage provision, as we will discuss later in the report, costs will be a large factor in student decision-making, especially in the Asia-Pacific region. China is already attracting a large number of Indian students, mostly in medicine, numbering 13,578 in 2014.25 Japan is also working to attract students by promoting higher education that is well-connected to local industry and well supported by policy, at half the cost of places like the UK and the US;26 Japan actually offers lower tuition costs for most international students than it does for local students, when taking into account equal tuitions for domestic and international students and government scholarships given to international students.27 Exchange rates Tuition increases are not the only culprit for the rising cost of international education. Australia was named by HSBC in 2014 as the most expensive country for higher education and this was also a result of the strength of the Australian dollar, which increased the cost of studying in the country at that time. However, more recently, the devaluation of the currency has been cited as a reason for students to consider the country as a more affordable option.28 Exchange rates play a role in outbound mobility figures, wherein if a country s currency depreciates significantly against the currency of the main destination markets for its outbound students, the outbound mobility ratio declines. As such, current British Council economic forecasts take into consideration that the US dollar is strong, meaning that study in the US is considerably more expensive than in years past. The euro has also depreciated significantly in 2014 and 2015 against the British pound, which is expected to adversely impact student flows from the Eurozone to the UK in the short-term. 23 24 25 26 27 28 HSBC, The Value of Education: Springboard for success, 2014. https://www.hsbc.ae/1/pa_es_content_mgmt/content/uae_pws/pdf/en/value-education-report.pdf Peter Walker, England has highest university tuition fees in industrialised world, survey finds, The Guardian, 24 November 2015. http://www.theguardian.com/education/2015/nov/24/uk-has-highest-undergraduate-tuition-fees-in-industrialised-world-survey-finds The Economic Times, Number of Indian students in China crosses 13,500, 25 May 2015. http://economictimes.indiatimes.com/nri/nris-in-news/number-of-indian-students-in-china-crosses-13500/articleshow/47420552.cms ICEF Monitor, Is Asia ready to be the next higher education superpower?, 10 June 2015. http://monitor.icef.com/2015/06/is-asia-ready-to-be-the-next-higher-education-superpower/ Internationals face higher tuition fees, University World News, 24 October 2014. http://www.universityworldnews.com/article.php?story=20141023150110719 Talib Haider, International students welcome falls in dollar making it best time to study in Australia, ABC News, 25 August 2015. http://www.abc.net.au/news/2015-08-25/australian-dollar-fall-is-good-news-for-international-students/6723438