Universities under-rated as mega-export industries

During the coffee break at an economics workshop last month in Brisbane, Australia, a senior official from the Australian Ministry of Foreign Affairs and Trade casually remarked to me that Australia’s top three exports are now coal, iron ore and educa­tion.

Academics are trained to be skeptical, so my immediate ques­tion to him was: “How did you calculate that?"

His reply was eminently reas­onable. Since they wanted to know how much the incomes of Australians had increased due to the purchases of foreigners, they added the living expenses and transportation expenditures of foreign students while they were in Australia to the increase in tuition revenues of Australian language institutes, colleges and universities.

We both agreed that although education may rank third in dollar terms, modern mining is a very capital intensive process.

Because the education services and consumption expenditures purchased by foreign students are quite labour intensive, “edu­cation exports" are, per dollar, much bigger job creators than mining.

Australians realized some years ago that their proximity to rapidly growing Asian countries and their English language edu­cational system gave them a market opportunity.

There are hundreds of millions of newly middle class families in China, India, Indonesia and Southeast Asia who want the very best for their children (now, very often, their only child) and economic growth means that they now have the income to pay for it.

Australia has been targeting that market for 20 years.

Today, the concern among Australian academics is that their early entry into the education market may have been at a price/ quality point that made sense in the 1990s, when family incomes in their target markets were considerably lower than now.

However, the parents of their students are extremely conscious of academic quality, and now they can afford to pay for more of it.

In the Age of the Internet, geographic proximity also now counts for less — and in any event, in addition to Asian coun­tries, the economic growth of Turkey, Brazil, Russia, etc. means that the potential market for high-quality post-secondary education in English is expand­ing globally.

The question is: who will supply that market?

Which is why this particular civil servant was spending his day at an academic research workshop — he wanted to under­stand better the research process which is such a dominant com­ponent of international rankings of universities, such as Shanghai University’s “Academic Ranking of World Universities."

And the reference points really are international. One example of the globalization of higher edu­cation comes from the job mar­ket.

Source: http://thechronicleherald.ca/opinion/132885-universities-under-rated-as-mega-export-industries