Exporting education: the answer to the mining boom hangover?

As we look ahead to 2015 it’s time to evaluate our future opportunities. Nick Stanley believes the key is exporting education.

Australia sits at the cusp of an important economic inflection point.  With the Mining Sector showing signs of slowing, we need to position for the next wave, and we need to do so quickly.

Like other countries that see change coming, like the swell of a wave in the distant ocean, we must start to move and get into position to be able to surf that wave and to make the most of it.

Examples abound, such as the UAE, a market traditionally reliant on oil that is currently making massive investments in new economic growth opportunities; so Australia needs to move and to organise to be ready for what comes next.

An excellent recent report by Deloitte* suggests that change is afoot “after the boom” and describes the “Fantastic Five” of (1) Agribusiness, (2) Gas, (3) Tourism, (4) International Education and (5) Wealth Management as being the most likely sectoral growth opportunities.

Of these, International Education strikes me as an opportunity that resonates; much has been said of Australia as a Smart Economy with a focus on knowledge.  In fact, in my previous blog I spoke of the “Tyranny of Distance”, the cost inherent in the export of bulky goods to access economies of scale via international markets, juxtaposed against the opportunity to leverage off our smarts and deliver product via digital mediums and the internet.

It makes sense then that we benefit from the competitive advantage that the internet and the changing landscape of international commerce presents to us.

And here’s a perfect opportunity.

But we do need to be more than just a “me to” provider in the export of Education.  There are many big brands against whom we have to compete in this space.  Education exporters from markets like the US and UK have deep pockets and are just as keen on this space as are we.

I am happy to report that we do have a few “cards up our sleeve” though!

Consider that the European Union predicts significant growth with student numbers set to grow 10x over the next 20 years in East Asia, coupled with year-on-year growth in International Education which is expected to continue at 7% or greater year-on-year until at least 2020 (reported by Deloitte*).

Australia is positioned well to take advantage of this growth with some interesting observations which back our potential.

1. Many stakeholders and decision makers within the Education sector in East Asia have direct experience with our Education sector; our brand is well known and respected from experience.  This is very important to a market where reputation is key.

2. We have the brand presence locally and the base-level networks and infrastructure.

3. The recent (and expected ongoing) decrease in the relative value of the Aussie dollar coupled with East-Asia’s appetite for Australia as a tourist destination round out a trio of unique natural advantages.

We need to now position to our advantage though and this means focusing on what we offer and better crafting our strategy.

International Education involves both the teaching of students in country (ie: inbound students who study in Australia) and also the teaching of students in the home country via digital delivery and via partnerships (and presence) in the market.

The former is a well-developed proposition.  The latter is where we need to get better and where we have an opportunity to dramatically increase our catchment, funnel and (ultimately) our market share.  There are some pioneers in the Australian space already looking to position in a digital environment using unique branding and delivery models.  Open 2 Study (a MOOC platform by Open Universities Australia) and the Deakin “Worldly” brand are two such examples, both appealing and engaging models that strive to unlock value in an International space.

However, we need more examples of this.  We need to now re-imagine what it means to deliver courseware via digital means; my opinion is that it’s time for a shakeup in terms of the digital education model and a revolution that moves away from a simple transfer of our printed material to a digital model.  We also need to be more conspicuous in market and position accordingly; for example, we should be a part of initiatives such as EduCity Iskander (a Malaysia Government backed initiative in Johor).

I just returned from an education summit in Toronto, Canada.  The Canadian Governor General was asked at the closing ceremony where he would recommend that Canada looks to reference a country that has an aspirational, performant education sector.  His reply?  Australia.

We are in an exciting position with a massively growing market on our doorstep, a premium international reputation and the capability.  Can we respond to the opportunity this presents?
Nick Stanley is a digital entrepreneur with a track record in Engineering, Education and web/cloud-based technologies.  Both a successful founder (Sky Software, PEPi Systems and CARBONcontrol) and angel investor (recent investments being Fysho.com and PunditConnect), Nick is passionate about the digital revolution in Australia and our growing emergence as a superpower in the global Knowledge Economy.  Nick lives in Geelong with his wife and three children and is an avid supporter of the Geelong Cats and Geelong in general!

One Comment

1. 

   Tim Mazzarol

   December 22, 2014 at 11:01 pm

   Thank you for this. As
   Thank you for this. As someone who has been engaged in research and teaching within the international education sector I agree that we can do more to foster the growth of this industry opportunity over time. However, I would also caution how we approach this and counsel against viewing this as another “gold rush”.

   Australia’s engagement in international education can be traced back as far as the 1950s with the Colombo Plan. During that period Australia took in a steady stream of scholars who we helped educate and send back home where many became leaders of government and industry.

   By the 1980s the trend towards the commercialisation of higher education at the international level was well underway. Margaret Thatcher led the charge on this in 1979-1980 with the introduction of course fees for the 100,000 or so international students who were studying for free in the UK.

   Australia followed this in the mid-1980s and the Dawkins plan saw the removal of the dual system (i.e. allowing CAEs and Institutes of Technology to become universities), plus the ability of Australian universities and colleges to charge fees to international students. From there the “market” for education services expanded into a multi-billion dollar industry.

   Throughout the 1990s and through to today education services has been one of Australia’s largest export industries. It pulled ahead of wheat and wool during 1980s and 1990s, and at last count was ranked 4th after iron ore, coal and gold.

   Given the relatively small size of the Australian university sector (only 39 universities), this country does very well at a global level. However, we cannot and should not take this sector for granted. The nature of education as a service is quite different from that of other areas. It should not be treated like a commodity and it must be recognised that what makes or breaks our success in this regard is the reputation our institutions have for quality.

   My own research shows that international students come to Australia for a range of reasons. Much depends on the type of student (e.g. school level, undergraduate, post graduate, vocational etc.), however, the key things are the country (cost of living, climate, proximity to home, visa issues, safety), the institutions (courses, reputation, recognition of prior qualifications, fees), and the outcomes (recognition of Australian qualifications, reputation, future job and migration opportunities).

   It would be fantastic if Australia could build an economic future based on education services. However, to do this requires investment from government and industry in our universities and colleges. It requires sufficient resources to allow good quality research programs to operate and for the retention of academics through the protection of their wages and conditions.

   If we privatize the sector and push towards a market-oriented “free for all” we risk damaging our existing high quality institutions and ruining the very foundations that have given this industry its current market position.