• Referenced in Text
• Used as preparation material for graphs
• Used as preparation material

Endnotes from text

During the past 15 years there has been a marked shift in educational levels and opportunities within this region together with a substantial change in regional relationships. Australian Universities have moved from providing education to sponsored Asian students to marketing their expertise in the region.

Until the early 1980s Australia regarded the sponsorship of people from less economically developed nations as both a desirable humanitarian and a sensible strategic goal. Under the guises of the Colombo Plan many of today's regional political and business leaders - particularly from South-East Asia - were sponsored to Australian Universities where they received the training desperately needed in their home countries.

With the growth experienced by the economies of Asia over the past few decades - due in part to such sponsorship schemes - the need for a 'Colombo Plan' has lessened.

But with the growth in their economies Asian nations have also experienced a exploding demand for higher education.

Australia has taken to satisfy part of this demand pull on a commercial basis.

This is driven by both an export push by the Universities - prompted by spare capacity and economic concerns - and a pull by students within Asia driven by unmet demand at home, the internationalisation of Asian businesses and personal desires to experience life in a Western culture.

The provision of educational services to fee-paying students from Asia has become a core feature of many Australian Universities and a valuable national export.

Income is earned not just from the fees paid for attending the Universities but from a range of flow-on effects including the provision of accommodation, food, clothing and entertainment and the benefits Australia gains from research conducted by post-graduate students in mining, agriculture and health.

Australia is also able to source many of the most educated immigrants from within Asia because young Asians find the experience of education in Australia a good one.

On a more strategic level the Australian government recognises the enormous goodwill and opportunities presented by the education of the next generation of Asian business and political leaders within Australia.


Reasons behind Export Push

The push to export higher education services into Asia by Australian Universities has been pronounced for over 20 years and has occurred in two quite distinct phases

• mid-1970s to mid-1980's   As a result of Over capacity in several areas

• mid-1980s to date         As a result of Funding cuts, the introduction of Fees and an Export drive by the Federal Government

Overview of the reasons

The reasons behind the move to export higher education services in Asia can be summarised in diagram form:

The elements of this diagram - falling into two distinct phases - that are pushing Universities into Asia are discussed in the sections below.

The major reasons behind the effort behind the push to export into Asia are 1:

• saturation of the Home Market
• growing commercial competition between Australian and International Universities
• desires to achieve economies of scale in use of facilities
• global strategic alliances between University and business enterprises

Spare Capacity [mid-1970's to mid-1980s]

The growth in overseas student numbers in Australia prior to the mid-1980s was largely in response to two factors 2:

• declining Australia enrolments in certain fields along with a desire to maintain full-capacity at these faculties
• tight budgets after 1975

In the late 1960's a trend - common in all Western countries - emerged for students to turn away from Engineering studies. The courses remained among the most difficult but relative salaries of Engineers compared to Commerce or Business graduates had declined markedly.

Excess capacity also emerged within the faculties of Medicine (with the imposition of entry quotas by the professional bodies), Teaching (due to declining birth rates and a surplus of life-time tenured teachers) and some physical sciences.

The resulting excess of tenured and specialist staff and over capacity meant that additional places could be filled at marginal costs.

The Australian government responded by opening up such faculties and sponsoring large numbers of new overseas students. The result was that by the early 1980s both Monash University and University of NSW had about 50% of their Engineering schools filled with overseas students 3 with some 96% of these coming from developing countries from the Australasian region 4.

Commercial Imperative [mid-1980s to date]

Prior to the mid-1980s the presence of international students on Australian campuses was seen as a central feature of the development aid programmes 5.

From that time there has been a gradual move to full fees in response to continued budget tightening [see above graph] and Balance of Payment difficulties in Australia

The release of both the Jackson (1984) and Goldring (1984) reports signalled a new direction in the 'selling' of Australian higher education services internationally - and within the region in particular. The aid programme - although it continues - was subsumed by a commercial imperative aimed at

• reducing costs to the Australian taxpayer by introducing both HECS for Australian citizens and fees for foreign students
• promoting trade and commercial links between future leaders in Australia and Asia
• encouraging cultural exchange with the region
• strengthening Australia's foreign policy interests

It was suggested that Australian Universities move to having 5 to 10% of full-fee paying international students between 1985 and 1990 and that Universities discourage more than a 25% proportion of a single Undergraduate course.

Since that time Australia has moved to become a leading international education services provider and exports from this sector represent some billions of dollars in economic activity and 50,000 jobs both directly and indirectly 6.

Some 60,000 international students are now studying in Australia, up from 18,000 only a decade ago - a 13% annualised growth rate.


Reasons behind Export Pull

Overview of the reasons

The Confucian tradition that extends, more or less, through East Asia has a reverence for education 7.

This is reflected in the high status accorded teachers and the desire of both students and their parents to see them succeed academically 8.

Throughout Asia both society and the government regard raising educational levels as critical to continued economic performance and fulfilment of personal aspirations 9.

The major reasons behind the marketing pull into Asia are 10:

• elements of convergent capitalism - increasingly cosmopolitan tastes of eduction consumers with Asia
• saturation of home Universities resulting from enormous demand
• following key clients - as more business is done globally Asian business must have personnel capable of operating in other cultures
• increased communication and international travel leading to a desire by some Asian students to experience life in a Western country

Demand exceeds supply in Asia

Singapore provides an excellent example to show how the demand for higher education is unmet with that which can be supplied domestically. Currently 40% of Singaporean University students are studying abroad 11.

Singapore is an interesting example because it is surprising that it should be unable to meet domestic demand because

• Singapore has long had one of the best education systems in Asia
• Singapore has been a developed economy for many years
• Singapore has had a reasonably low population growth rate
• Singapore is a very planned and regulated society and it almost inconceivable that even the Singaporean government has failed to provide adequate educational services

One only has to extend that if a country such as Singapore cannot meet demand for University places how much greater must the problem be in Indonesia, Malaysia, China, Thailand or India? No doubt all that prevents students from these countries from studying abroad in equal proportions is a lack of funds. The unmet demand is enormous.

As the region continues to experience economic growth the demand for education will also grow. So too will the ability of parents to send their children abroad to be educated. This increasing demand for education driven by an increased ability to pay for it is in keeping with the Cascade Effect seen spreading through Asia over the past 40 years 12.

The Confucian traditions also cause great embarrassment and loss of peer group prestige for those students who fail to secure a place at a University - and also for their parents 13.

With supply restricted at home many parents, even from comparatively poor families, save very hard to provide for a University education abroad if their child should fail to get a place at home. This represents enormous personal sacrifice at times.

In the case of Malaysia, citizens of Chinese descent are also actively discriminated against by the Malaysian government in selection for domestic University places and have seen their preference for English-language schools run headlong into Malay only politics 14.

The result has been a strong demand for places at Singaporean, Australian, British, Canadian and New Zealand Universities from within the Malaysian Chinese community - in many cases studying overseas represents the only way of obtaining a degree.

As already discussed, competition for places (and increased fees) in Singapore has increased and Australia has benefited from the spill-over. Malaysian students of Chinese descent have long been represented on Australian campuses - particularly the Engineering schools of RMIT and Monash - and during the early 1980's represented over 50% of Foreign students in Australia 15.

Australia has also benefitted from both the sheer cost of University education in Indonesia 16 (which makes study at an established Western University look very attractive) and the monumental neglect of higher education under the Dutch which lead to severe skills shortages - including trained teachers - after Indonesian independence 17.

Indonesian parents, in common with others in the region, have come to identify a Western-style education with improved social and economic futures for their children 18.

Such was the task in 1945 that even 50 years after independence the domestic demand and supply for education is still unmatched, forcing many Indonesian students overseas.

Internationalisation of Asian business

An often overlooked element driving the education of Asian students in Western Universities has been the realisation by Asian businesses that they need to understand Western cultures just as much as their Western business counterparts need understand Asian cultures.

For example, the government of Singapore has moved in recent years from actively discouraging study overseas 19 to a position where relocating overseas for a period is seen as loyalty to Singapore and it's future 20.

Singaporean businesses often prefer to hire Singaporeans with a Western degree when skills at public relations and communication and independence of thought are required 21. Foreign educated staff are regarded as being more independent and confident and to have a wider international outlook 22.

Taiwan likewise has seen increasing interest by local businesses in hiring Western trained staff as more of their efforts have moved from basic manufacturing, through OEM and onto OBM. The move to OBM has required Taiwan based companies to better understand their global markets and they simply cannot do this with a culturally blinkered workforce 23.

Further, many specialty subjects increasingly required by Asian based businesses such as health, communication and biological sciences are simply unavailable at Asian Universities and Australia provides the only undergraduate degrees in the region apart from Japan (where it is difficult to enter as an undergraduate).

Likewise, most Asian Universities dedicate little thought and even less resources to Mature Age students at a time when more and more business are seeing the value in employees returning to study. Such students are often forced overseas 24.

What the trend indicates is that Asian businesses along with their Western counterparts are realising the benefits that can be leveraged from a workforce that is well educated and comfortable with other cultures.

It can be assumed that this trend will become more apparent as internationalisation and globalisation continues and will only increase the export pull on Australian Universities providing they can provide the right educational mix.

Personal factors for choosing Western Universities

One of the more striking factors to emerge from the burgeoning middle-classes within Asia is a personal desire by both parents and students for the student to experience living within a Western culture - particularly an English speaking one - and to be educated in a different style to that which would be experienced at home.

Asian parents recognise, of course, that skills encompass more than a simple degree in a particular subject. What is just as important is an ability to translate those skills.

They recognise that by attending a Western University their children will become familiar and comfortable with Western culture at a personal level; helping them to move from one business environment to another during their working life. This is a valuable asset, and one worth paying attention to in a World where business is becoming more international.

So to, many parents have come to question whether the highly competitive, rigid and exam-orientated cultures in most Asian Universities actually serve the student well 25.

There is much merit to the on-going and constant assessment style promoted within Western universities rather than relying on cramming for the single round of 'killer' annual exams common at Aisan Universities.

Such assessment promotes questioning and allows flexibility to tailor programmes to individual student needs and aspirations. The annual exam assessment style favoured in Asian Universities has been criticised for producing students who can remember facts but who lack the ability to see beyond them.

In less sophisticated economies the ability to regurgitate facts is more than sufficient - however as several Asian economies have recently developed beyond this phase - Singapore and Taiwan being the notable examples - concern is now being expressed that the children of these countries lack the ability to think beyond the immediate. To do this needs the ability to question and to inquire without reference to known facts.

On a more personal level, many Asian students themselves feel no desire to engage in the local University exam culture that leads to great personal stress. Despite having to uproot themself from friends and family to get a degree in Australia, or any other Western Universities, this is seen as a far healthier lifestyle by such students.

Factors for choosing Australian Universities in particular

As can be clearly seen from the above pie-charts - Australia is now the preferred destination by international Singaporean University students.

Between 1987 and 1994 Australia took considerable market share from both the US and Canada. This is all the more remarkable given that this has occurred at a time more and more Singaporean students are studying internationally and at a time Australia moved to funding by fees.

Reasons mentioned for choosing Australia over the other destinations included 26

• close proximity to Singapore and same time-zone (particularly Perth)
• personal safety (particularly compared to the US)
• mild climate
• work rights are more relaxed
• more affordable fees, living and travel costs
• lifestyle factors (stable and quiet)

Students from Taiwan also held all these factors in high regard 27 along with the established presence of a Taiwanese community in NSW and Queensland. Students from Indonesia, Malaysia and Thailand showed similar preferences.

Such matters as proximity and personal safety figured highly in the minds of parents who, after all, are actually paying for the education.

References used

Referenced in Text

David Ch'ng, Marketing in Asia, Course Notes, Melbourne Business School, June 1997

Hudson H ed, Overseas Student Policy in Australia, 1980-1990, Federal Industry Commission

Orr K ed, Appetite for education in contemporary Asia, Australian National University, 1977

Smart D & Ang G, Medium Term Market Opportunities for Australian Higher Education: a pilot study of Singapore, Asia Research Centre, Murdoch University, 1992

Smart D & Ang G, Enhancing Australia's Recruitment of International Students: a Survey of Taiwan, Asia Research Centre, Murdoch University, 1995

Smart D & Ang G, Enhancing Australia's Recruitment of International Students: Singapore Revisited, Asia Research Centre, Murdoch University, 1995

Used as preparation material for graphs

Exports of Education Services, Federal Industry Commission, Australian Government Publishing Service, report #12 1991

Higher Education Students Time Series Tables, Department of Employment, Education and Training, Australian Government Publishing Service, 1996

National report on Australia's Higher Education Sector, Department of Employment, Education and Training, Australian Government Publishing Service, 1993

Selected Higher Education Student Statistics 1994, Department of Employment, Education and Training, Australian Government Publishing Service, 1995

Used as preparation material

Katz B, How to Market Professional Services, Nichols Publishing Co, New York, 1988

Kotler P, Marketing Management, 5ed, Prentice-Hall, New Jersey, 1984

Romm T et al, Overseas Students in Australia: a Quantitative Exploration of Pre-Purchase Expectations and Post-Purchase Satisfaction, Working Paper 7-1991, Department of Management, University of Wollongong, 1991

Survey of International Students, Department of Employment, Education and Training, ref:RC-1105, 1993

Endnotes from text

2 Hudson H, Overseas Student Policy in Australia, 1980-1990, Industry Commision, p1

3 Hudson H, Overseas Student Policy in Australia, 1980-1990, Industry Commision, p1

4 Hudson H, Overseas Student Policy in Australia, 1980-1990, Industry Commision, p3

5 For example, many students paid nothing and even those who paid the Overseas Student Charge paid only 25% of the cost of an Engineering degree with 75% met by the Australian taxpayer. Hudson H, Overseas Student Policy in Australia, 1980-1990, Industry Commision, p1

6 Which, given the concern parents naturally have for the welfare of their children, is cause for great concern when media articles appear suggesting Asian students are attending schools in other countries due to the negative and racist campaign being waged by Senator Pauline Hanson and her One Nation Party.

7 as it did in the West until comparatively recently.

8 Smart D & Ang G, Enhancing Australia's Recruitment of International Students: a Survey of Taiwan, Asia Research Centre, Murdoch University, 1995, p16

9 Smart D & Ang G, Medium Term Market Opportunities for Australian Higher Education: a pilot study of Singapore, Asia Research Centre, Murdoch University, 1992, p6

10 David Ch'ng, Marketing in Asia Course Notes #970046 - #970058, Melbourne Business School, June 1997

11 Smart D & Ang G, Ibid(Singapore Pilot), p18

12 David Ch'ng, Marketing in Asia, Melbourne Business School, June 1997

13 Smart D & Ang G, Ibid(a Survey of Taiwan), p16

14 Orr K ed, Appetite for education in contemporary Asia, Australian National University, 1977 p67

15 Hudson H, Overseas Student Policy in Australia, 1980-1990, Industry Commision, p4

16 Orr K ed, Ibid, p105

17 Orr K ed, Ibid, p100

18 Orr K ed, Ibid, p93

19 On the grounds - correctly - that it only encouraged Singaporeans to emigrate and - less correctly - that it was a 'brain drain' and unpatriotic!

20 Smart D & Ang G, Enhancing Australia's Recruitment of International Students: Singapore Revisited, Asia Research Centre, Murdoch University, 1995 p13

21 Smart D & Ang G, Ibid(Singapore Pilot), p14

22 For example, the top scholarships for the Public Service Commission are all given to Western Universities, Smart D & Ang G, Ibid(Singapore Pilot), p13

23 Smart D & Ang G, Ibid(a Survey of Taiwan), p16

24 Smart D & Ang G, Ibid(Singapore Pilot), p8

25 Smart D & Ang G, Ibid(Singapore Pilot), p14

26 Smart D & Ang G, Ibid(Singapore Revisited), p19

27 Smart D & Ang G, Ibid(a Survey of Taiwan), p31