Global Higher Education . . . a changing landscape

1
Global Higher Education . . . a changing
landscape
education and training opportunities in
the
international marketplace
Presentation to - VTA State Conference, Melbourne

21/22 April 2005

• Ron Perkinson
• Principal Education Specialist
• International Finance Corporation
• (World Bank Group)
• www.ifc.org

2
The Global Education Market

• Total 2.3 trillion
  approx one third of
  market in USA
  around 15 only in the developing world
• Teachers 5 of global labor force
• Primary Secondary Education
  substantially
  public funded
• Tertiary Adult Education
  changing
  landscape - free provision disappearing
  regulatory -
  governments more liberalized
  private sector participation
  growing

Sources Merrill Lynch 2000 OECD 2002 World
Bank IFC
3
Higher Education Worldwide

• Yr 2000 there were over 90 million students
  enrolled in higher education worldwide
• By 2003 est. over 100 million students worldwide
  approx 4 m of the 11 inc.
  was in China alone around 2 m
  increase in India the same period
• The Private higher education market is estimated
  to be worth more than 300 billion worldwide on
  current expenditures alone and growing

Sources Merryl Lynch 2000 IFC staff estimates
World Bank
4
Higher Education the perfect storm
. . . the seven
converging forces of change

• The increasing importance of knowledge
• The change in demographics
• Decline in public financing sourcing
  alternative financing
• The further impact of globalization
• The impact of increasing competition
• The continued impact of internationalization
• The continuing Information Communications
  Technologies revolution

Source World Bank Constructing Knowledge
Economies 2002 The Changing Enterprise ACE
2002 International Finance Corporation
5
World Population Growth
Source 6 Billion Human Beings - Musée de
l'Homme Muséum National d'Histoire Naturelle,
Paris France World Bank/
IFC
6
Financing of Higher Education
7
World Bank Group
4 decades of education lending
65
22
Projects supporting more than one level of
education or projects such as those supporting
lifelong learning that do not fit well into one
of the other categories
8
Between 2003 to 2005 the of lending for
higher education declines further
9
Funding Comparatives
. . . the most populous examples
Sources UNESCO 1999 2000 World Bank 2001 US
Department of Education 2001 Department of
Education Skills UK, 2002 China National
Center for Education, 2002/3 OECD 2002 All
Sth East Asian countries without China India
10
Tertiary Education in Biggest 40 Developing
Countries
OECD 7,712 2001
618
Sources World Bank Development Indicators World
Bank Edstats UNESCO Global Education Digest
OECD Education at a Glance IFC
calculations Developing 40 includes Angola,
Argentina, Bangladesh, Bolivia, Brazil, Bulgaria,
Cambodia, Chile, China,Colombia,
Dominican Republic, Ecuador, Egypt, Ghana,
Guatemala, Hungary, India, Indonesia, Jamaica,
Jordan, Kenya, Madagascar, Malaysia,
Mauritius, Mexico, Mozambique, Pakistan, Peru,
Philippines, Poland, Romania, Russia, Senegal,
South Africa, Thailand, Trinidad
Tobago, Turkey, Uganda, Uruguay, and Vietnam
Note All amounts are in constant 1995 US Values
11
Enrollments Tertiary Sector
Sources World Bank Development Indicators World
Bank Edstats UNESCO Global Education Digest
OECD Education at a Glance IFC
calculations Developing Asia includes
Bangladesh, China, India, Indonesia, Malaysia,
Philippines, Thailand, and Vietnam
32 Developing Country Sample includes Angola,
Argentina, Bolivia, Brazil, Bulgaria,Chile,Colombi
a, Dominican Republic, Ecuador, Egypt, Ghana,
Guatemala, Hungary, Jamaica, Jordan, Kenya,
Madagascar, Mauritius, Mexico, Mozambique,
Pakistan, Peru,Poland, Romania, Russia, Senegal,
South Africa, Trinidad Tobago, Turkey, Uganda,
and Uruguay
12
Spending Per Student Tertiary Sector
Developing Asias Global Peers include Angola,
Argentina, Bolivia, Brazil, Bulgaria,Chile,Colombi
a, Dominican Republic, Ecuador, Egypt, Ghana,
Guatemala, Hungary, Jamaica, Jordan, Kenya,
Madagascar, Mauritius, Mexico, Mozambique,
Pakistan, Peru,Poland, Romania, Russia, Senegal,
South Africa, Trinidad Tobago, Turkey, Uganda,
and Uruguay
13
Enrollment in Private Higher Education (as a of
total)
Sources EdStats, World Bank IFC OECD Various
Government Statistics Chile includes 7 publicly
funded Private Catholic Universities
14
Knowledge Drives Economic Development
. . . important
impact comes from skills literacy

• Knowledge is an all important driver of economic
  development
• Not just about putting more highly qualified
  people in to higher paying jobs
• Proven impact on economic development comes from
  increasing skills literacy mid higher level
  skills are not just about degrees indications
  show quite the opposite (University of British
  Colombia Literacy Survey)
• New skills training knowledge dissemination of
  economic relevance need to reach larger firms,
  private sector, SMEs, micro-enterprise,
  individuals and the unemployed
  reach
  traditional sectors (agriculture, small
  manufacturing, services, crafts, tourism, etc)
  
  to help economies be more productive and
  competitive
• More highly skilled workforce isnt just for big
  firms and government
• Need to turn countrys human resources into
  strategic advantage

Source University of British Columbia
Literacy Survey Ana Ferrer, David A. Green,
and W. Craig Riddell - The International Adult
Literacy Survey (IALS) was a 22-country
initiative conducted between 1994 and 1998.

http//www.statcan.ca/english/research/89-552-MIE/
89-552-MIE2004012.pdf
15
Lifelong Learning
Changing Student Profiles

• Adults with tertiary qualifications increased
  from 22 to 41 over last 25 years in OECD
  countries
• Over 40 of undergraduates in US 30 of
  Canadas undergraduate students are over 25 yrs
• Yr 2000 over 20 of first year university
  students were over 27 yrs in
  Australia, NZ, Denmark, Norway Sweden
• Lifelong learning attracting new learners more
  diversified older and
  part time students

Sources OECD 2000 The Changing Enterprise
ACE 2002
16
Lifelong Learning

• Developing a Lifelong Learning Framework
• Requires fundamental changes to the education
  system
• HEIs need to adapt change Missions,
  pedagogical processes, accommodate different
  learning models (formal education / on-the-job
  training / at home learners)
• The role of technology can expand access and
  change the nature of learning facilitating new
  modes of delivery (e.g. distance / online
  learning) and mixed modes
• The framework will accommodate the constant
  updating of skills, to develop a highly qualified
  and flexible labor force with new sets of skills
  and competencies
• Becoming increasingly important in Asian markets

17
Globalization
Internationalization
18
Cross Border Investment
HEI Campuses In Foreign Countries

• Since Yr 2000
• Laureate (previously Sylvan International
  Universities) invested in Spain, France,
  Switzerland, Mexico, Chile, Ecuador, Panama,
  Costa Rica, Peru and looking elsewhere
• Apollo International invested in Mexico, India,
  Holland, Brazil
• University of Nottingham CIBT/Apollo in China
• RMIT in Vietnam
• Monash in South Africa
• Universitas 21 in Singapore
• Manipal in Nepal and Malaysia

Sources Chronicle June 2003 Company 10-K
Reports IFC 2004
19
UK recent foreign campus
examples in China
University of Nottingham
first
foreign HEI to open a campus in China (Sept 2004)

same degrees awarded sit same exams

foreign/cultural language
immersion alternatives
over
50 UK academic involvement improving
internationalization Napier University of
Edinburgh
NU opening an
international franchise campus on Zhengzhou
University of Light Industry, Henan Province,
China Chinese
students study for Scottish degree in China
Now exploring
potential for undergraduate and postgraduate
exchange programs, as well as research
Sources The Scotsman 1st October 2004
Business China 14 March 2005 IFC 2005
20
Students Studying Abroad

• Yr 2000 - gt1.6 million international tertiary
  students abroad in OECD countries alone
  
  over 2 million across the
  world
  estimate 8 million students by
  2025
• In 2004 USA dropped to 576,000 or about 35 of
  OECD total UK (14)
  Australia (13) Germany (12) France ( 8 )
  NZ ( 5 ) most from developing countries
  Chinese students
  Australia (43 last year) NZ (60 of total
  univ)
• China gt 60,000 foreign students in 2002 of
  which approx 70 from Asia 12 from Europe
  11 from the USA growing
• Russia In 2001, 90,000 students 40,000 from
  CIS countries around 100,000 today
• Malaysia 37,000 students today

Sources OECD 2000, 2002 AUSTRADE 2003 NZ Trade
2003 China Education Yearbook, 2002 Education
World 2003 Malaysia MoE 2004
21
International Students Big Business

• Australia
  
  210,000 foreign students in
  Yr 2003 - with 18,000 in off-shore VET, in 24
  countries - more than 50 were located in China
  
  predicting 560,000
  foreign students by 2025
  double again in
  distance programs
  
• of Service Exports
  
  13 and 8 respectively of
  Australia and NZs in Yr 2003
  
  4.2 and 3.2 respectively
  of US and UKs

Sources OECD IFC World Bank Report
commissioned by IDP Education Australia AIEA
Fact Sheet NCVER Australia 2005 China
Education Yearbook, 2002 World Bank Bashir
2005 last figure Yr 2000
22
But the trends are changing - 1

• In 2003 Australia became second most expensive
  country to study in after the UK, with tuition
  costs more than doubling since 2001
• Annual living costs for students in popular
  English speaking countries - UK (US11,152)
  Australia (US9,519) Canada and US (just under
  US9,000) NZ (US8,686)
• Competition increasing from Asian countries
  Hong Kong
  (US7,081) India (US1,515)
• Australia impacted by Aus FOREX increase plus
  12 pa inc in tuition fees and living expenses
  plus other factors

Sources Comparative Costs of Higher Education
for International Students 2004 IDP, Australia
23
But the trends are changing - 2

• China
• Record 20 million students enrolled in Chinese
  colleges in 2004 the largest college-student
  population in the world
• 4.2 million freshmen accepted - double the number
  of 1998
• College acceptance rate this year was about 60
• University TVET students see growing
  attractiveness to study at home - Less Visa
  complications
• Growing two-way relationships with foreign
  partners
• Singapore
  
  170 private tertiary providers with
  119,000 students
  75 of them study in foreign joint/affiliate
  programs 35 were over 30yrs
  30 were 25yrs to 29 yrs
  most were lifelong learners

Sources Business China 14 March 2005 IFC 2005
24
But the trends are changing - 3

• British universities also rely heavily on the
  Chinese market
• In 2004 overseas students grew to around 200,000,
  bringing in over 1.25 billion or 2.4 billion in
  fees
• International student numbers fell by 5.3 in
  2005
• China made up 25 of UK 2004 international
  student numbers
• UK feedback - Reasons for changing trends in
  China include
  the perceived
  improvement of institutional quality in China
  - more appealing to study at home
  
  the Chinese labor market no
  longer putting such a large premium on foreign
  degrees
  
  local and
  foreign qualifications, joint foreign degrees and
  local work experience count for greater
  employability
  
  Certified training and LL/Lng programs
  growing in appeal
• In 2005 British HEIs have around 160 joint
  program affiliations with Chinese HEIs, with
  many more planned

Source Economist - March 2005 IFC
25
Chinas Learning Needs Beyond Formal Education
Beyond Retirement Age
Training for the unemployed
Labour Force (750m)
Remedial/ Updating/ Upskilling the Participating
Workforce
Adult learners
Government Failure students out of school
Higher Ed
Secondary
Formal Education (244m)
Basic Education
26
International student preferences and
destinations are changing

• Greater competition from LAC, EU, Central America
• Partial international study can satisfy cultural
  immersion needs
• Universities used to hold the high ground
  new
  systems of education, training and lifelong
  learning are demanding programs of greater
  economic relevance both university and
  non-university tertiary
  
  
• the educational, social and commercial gains
  from University / TAFE partnerships in cross
  border trade in education services are yet to be
  optimized

27
And are AID and TRADE talking to each other?

• AID needs TRADE in selected projects to convert
  Technical Assistance in to downstream
  sustainability
• TRADE in some cases can leverage alternative
  downstream resources that governments can no
  longer afford to carry

28
Demand For Greater Program Diversity

• Employers in region requiring educational
  credentials or certified training important
  for job market
• Employers seeking greater flexibility of program
  choice want training and job
  preparation for jobs that exist and improved
  competencies for career enhancement
• Typical local career providers can include
• Professional schools accounting, language
• Business schools
• Engineering schools
• Training in ICTs low / med / high-end
  technologies
• Industry schools (tourism agri-business
  forestry fishing etc)

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Local Context Is All Important

• What is the role of government enabler or
  controller?
• Local education policy objectives and what is
  the effectiveness of local policies and
  frameworks
• Adequacy of student financial support
• Understanding of economic and social development
   
• demand for fee-paying programs
  
  demand, supply gaps in public provision
  relevance of
  current programs
  needs of traditional
  sectors
• Historic educational traditions, social
  cultural values
  or in past political ideology
  (Africa, CEE, India)

30
Changing Business Models

• Changing modus operandi Public goes Commercial
  / Private new forms of competition
• Shift from venue-driven to market-driven
  delivery systems
• Market demand for flexible delivery options
  (evenings weekends distance learning use of
  new learning technologies)
• The campus-based to web-based Continuum, is
  changing models
  academic and investment confidence
  in e-learning is growing 
• From isolated university models to linked HEI
  courses QA and credit
  transfer systems
  broader
  options and career pathways
• Separation of institutional management and
  academic power of faculty different control
  over business administration

31
Distance Education

• Tertiary distance education fastest growing
  sub-sector represents at
  least 15 of all higher educations students
• Asia has 3.5 m students (2000)
• 30 of all tertiary courses in Russia are
  distance
• LAC has over 1 million tertiary distance
  education students
• E.A.D.T.U. 18 members 14 countries gt
  900,000 students
• British Open University with over 154,000
  students
  also delivers in to developing countries
• Australia over 50 of foreign students enrolled
  on Australian campuses from Singapore and Hong
  Kong, are distance

Source The Changing Enterprise ACE 2002
World Bank IFC IDP Education Australia 2002
32
On-Line Education steady growth

• Yr 2002, 19 of corporate training in US was
  on-line up from around 7 three years
  earlier est
  150 billion industry by 2025
  major growth predicted
  in developing countries
• Estimate approaching 1m students on-line in China
• Tec de Monterrey has over 100,000 students
  Universidad Virtual has gt80,000 doing part or all
  courses on-line over 5,000 outside
  of Mexico
• In the US - 1.9 million students studying on-line
  in 2003 2.6 million
  students (16 over all) in 2004, or 24 increase.
  Approx 40 of these are fully on-line (18 inc)

Sources IDC IFC Tec de Monterrey 2003 World
Bank / AVU 2003 Sloan Consortium 2004
33
University of Phoenix On-Line
Enrollment Growth
109,800
79,400
49400
29000
18000
10,000
Source Chronicle Nov 2002 Charles Schwab Sept
15th 2004
34
Cross border education opportunities

• Internationalization provides easy and low risk
  stepping-off point
  
  for customizing and
  disseminating new types of knowledge and skills
  
• program partnerships - for improving
  curriculum content, development research
• opportunities for student and faculty exchange
  plus joint programs that accommodate cultural
  immersion
• adding value by facilitating transferability
  of credits and qualifications (Are the
  advantages of having a qualifications framework
  at home, being optimized?)
• Internationalization can lead to other
  commercial initiatives

35
PPP Example - Blended Campus/On-line Joint Degree

• Stevens Institute of Technology - China Hybrid
  Program
• 1/3 taught online by Stevens faculty / 1/3 taught
  by Chinese faculty using Stevens curriculum / 1/3
  taught by Stevens faculty onsite in Beijing
• Tuition - Revenues split 50-50 between schools
• Chinese pay for classrooms, Chinese faculty,
  local software and workstations
• Stevens pays for Stevens faculty, travel, housing
• Stevens is university of record holds student
  transcripts and history
• Chinese manage classrooms, logistics and Ministry
  of Education
• Partner Institutions in China
• Beijing Institute of Technology Shanghai Jiao
  Tong University Central University of
  Finance Economics

36
For International Consulting . . .

• Local governments are World Bank clients
• Local market will hold the greatest power and
  influence when deciding who to use so it
  bodes well for those that Internationalize and
  get on the ground first!
• Decision making local experience is important
  Internationalization
  and program affiliations the quickest way to
  obtain local experience support
• Private higher education providers
  not
  to be underestimated
  tend to
  respond more quickly to joint initiatives
  strong reputations
  for quality relevance of local programs, with
  high employability of graduates
• Use of donor/ grant/ trust funds to assist with
  positioning
• Promote successes publish case studies

37
Future Outlook
Financing of education will tighten
demographics outweigh fiscal realities growth
in non-public financing New business models
Public going Private trend will grow
Knowledge societies and lifelong learning
important for economic development more
flexible mass e-delivery
new systems for education and
training Globalization and Internationalization
changing the future landscape of higher
education, national and cross-border
transferability of credits
qualifications, national foreign
optimizing Education/AID/Trade efforts
investments essential ICTs and the Internet
optimizing use of new technologies
models advancing quality-based mass education
delivery
38
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