The internationalisation of higher education The internationalisation of higher education in New Zealand:in New Zealand:

what went wrong and how to fix it?what went wrong and how to fix it?

4:00pm, Thursday, August 74:00pm, Thursday, August 7thth, 2008, 2008

Professor Nigel HealeyProfessor Nigel Healey

University of CanterburyUniversity of Canterbury

‘‘No shrinking violet’ or desperate business No shrinking violet’ or desperate business school dean?school dean?

2003 2004 2005 2006 2007 2008B 2008F

Domestic 1612 1625 1640 1578 1765 1811 1982

International 540 739 816 618 412 311 338

Total 2152 2364 2456 2196 2177 2122 2320

UC College of Business and Economics EFTSUC College of Business and Economics EFTS

OverviewOverview

From ‘bit’ player to world leader in five years: explaining NZ higher education’s ‘transformation’

Why our passive ‘open doors’ business model stopped working

Finding our place in the new global higher education market

A world leader in international tertiary A world leader in international tertiary education by 2005education by 2005

International(non-resident)

Foreign(non-citizen)

Australia 17.3% 20.6%

New Zealand 17.0% 28.9%

UK 13.9% 17.3%

Switzerland 13.2% 18.4%

France 10.8% -

Germany - 11.5%

USA 3.4% -

OECD average 6.7% 7.6%

Source: OECD Education at a Glance 2007

……from behind the curve – increase in foreign from behind the curve – increase in foreign tertiary enrolments to 2005 (2000 = 100)tertiary enrolments to 2005 (2000 = 100)

0200400600800

1000

Australia NZ UK

Switzerland

France

Germany

USAOECD

Source: OECD Education at a Glance 2007

Explaining the ‘transformation’ (1): motives for Explaining the ‘transformation’ (1): motives for internationalisationinternationalisation

Altruistic – supporting economic development in the Third World (eg, ‘Colombo Plan’)

Geo-political - building geo-political connections and profile by educating foreign leaders of tomorrow (often disguised as altruism)

Talent-seeking – attracting best minds as future researchers, citizens (eg, Australia’s education-linked immigration policy, US postgraduates)

Pedagogic – creating multinational, multicultural learning environment for the benefit of all students

Economic – seeking new high-margin customers (often disguised as pedagogical)

Explaining the ‘transformation’ (2): from Explaining the ‘transformation’ (2): from altruistic to economicaltruistic to economic

Paradox of democratisation of higher education Rising participation rates (public policy goal) lead to

budgetary pressures on taxpayer subsidies to higher education….

…falling per capita subsidies to universities…

…introduction of (politically regulated) domestic tuition fees

As resources squeezed, taxpayer subsidies for international students first to go full-cost international tuition fees introduced

Tertiary Gross Enrolment Rates (2006)Tertiary Gross Enrolment Rates (2006)

United States 82%

New Zealand 80%

Australia 73%

United Kingdom 59%

Malaysia 29%

China 22%

Indonesia 16%

India 12%

Vietnam 9% (2000 latest data)

Source: UNESCO

Explaining the ‘transformation’ (3): full-cost Explaining the ‘transformation’ (3): full-cost international tuition feesinternational tuition fees

Advent of full-cost international tuition fees: UK, early 1980s Australia, mid-1980s New Zealand, early 1990s

Impact skews relative attractiveness of international vis-à-vis domestic students Domestic EFTS: tuition fee* $4301 SAC: $5039 International tuition fee*: $18,100

Add to the mix a policy allowing public, non-residential schools to charge full-cost international tuition fees

*UC undergraduate business degree 2008

Explaining the ‘transformation’ (4): the Explaining the ‘transformation’ (4): the perfect stormperfect storm

For a perfect storm, need the right combination of supply and demand

NZ government policy creates supply-side conditions

Social, economic and political conditions in Asia create the demand

Explaining the ‘transformation’ (5): demand Explaining the ‘transformation’ (5): demand driversdrivers

Social + Demographic extended family support for children, perceived high value

of education demographic pyramids

Economic rapid economic growth drives ability to pay economic development puts premium on high-skilled

knowledge workers globalisation encourages English language acquisition

Social, demographic and economic factors grow demand faster than domestic supply…resulting in

Political governments, critically China, allow excess demand to go

offshore to foreign universities

India’s population pyramidIndia’s population pyramid

……and it once looked as if the demand would and it once looked as if the demand would grow for ever…..grow for ever…..

0

1

2

3

4

5

6

7

8

2000 2005 2010 2015 2020 2025

Mil

lio

ns

Projected demand for Projected demand for international higher international higher

educationeducation

Source: IDP

The special features of NZ’s ‘transformation’The special features of NZ’s ‘transformation’

Rapid and opportunistic Rational response to unprecedented demand growth, as a result of

public policy change

Skewed to major growth markets – especially China, Korea

Unusually large role of key players Role of public schools as feeders to universities

Role of agents in bringing international students to NZ schools

Unplanned and (initially) unwilled expansion of numbers in universities International offices not geared up to managing, and later

sustaining, international numbers

Resistance to institutional adaptation to support internationalisation

International student visas by sectorInternational student visas by sector

0

5000

10000

15000

20000

25000

2000 2001 2002 2003 2004 2005 2006 2007

UniversityPolytechPTESchool

Source: Education New Zealand

The China effect: international visas issued to The China effect: international visas issued to ChinaChina

0

2000

4000

6000

8000

10000

12000

2000 2001 2002 2003 2004 2005 2006 2007

UniversityPolytechPTESchool

Source: Education New Zealand

Chinese visas as % of totalChinese visas as % of total

0

10

20

30

40

50

60

70

80

2000 2001 2002 2003 2004 2005 2006 2007

UniversityPolytechPTESchool

Source: Education New Zealand

Chinese students as % international tertiary Chinese students as % international tertiary enrolments, 2005enrolments, 2005

0

10

20

30

40

50

60

Australia NZ UK US

Source: OECD Education at a Glance 2007

……leaving NZ universities exposed as perfect leaving NZ universities exposed as perfect storm dissipatesstorm dissipates

Social, demographic and economic drivers still strong…

…but political forces have shifted

Huge expansion in domestic capacity: Public higher education in China

Private education in India

Excess demand heading offshore is being choked off at source

And Asian countries moving into export education themselves for all the usual reasons altruistic, geo-political, talent-seeking, pedagogic,

economic

Investment in higher education: a Chinese Investment in higher education: a Chinese perspectiveperspective

Regular higher education enrolments up from 5.5m in 2000 to 18.9m in 2007

Total expenditure on education has increased from 253bn RMB (1997) to 981bn RMB 2006)

Tertiary participation rates now 22% (3.4% in 1990)

Major investments in elite higher education: Project 211

Project 985

Project 111

Chinese enrolment rates (%)Chinese enrolment rates (%)

0

20

40

60

80

100

120

1990 1995 2000 2005 2006

Primary

Junior Secondary

Senior Secondary

Tertiary

Source: China Education Yearbooks

The role of the private sector: India (1)The role of the private sector: India (1)

Challenge for India: 411m people in the 6-24 age group (40% of total) India has a number of elite national institutions:

7 Indian Institutes of Technology (IITs) 6 Indian Institutes of Management (IIMs) 3 Indian Institutes of Information Technology (IIITs) 19 Central Universities Indian School of Mines, Dhanbad

…but only 338 public universities and 12% gross participation rate (7% official participation rate)

The role of the private sector: India (2)The role of the private sector: India (2)

India cannot afford public investment in higher education: urgent demand for expansion in secondary education (only

60m of 170m primary students progress to secondary schools)

Indian government does not have the financial resources to invest in the way that China can

India has encouraged private sector to invest: 75% of HEIs in India now private; 90% of colleges in

engineering, IT and management private Over the last 10 years, huge expansion in private sector

provision Many private providers using distance/on-line learning to

leverage scarce resources, exploit economies of scale

Private sector in Asia-PacificPrivate sector in Asia-Pacific

Japan, South Korea, Taiwan, Taipei, Indonesia, and the Philippines up to 80% students are in private institutions

China 1200 private institutions

Vietnam 12% of students in private institutions

Malaysia 691 private colleges and universities and 4 foreign

university campuses

So what went wrong?So what went wrong?

Popular explanations: Bad publicity

High exchange rate

Competition from Australia – particularly for immigration market

Economics 101: Unexpectedly rapid supply-side response in Asia, choking off

demand

Over-exposed to single market

New competition – from Europe (Bologna), Asian export education, from spread of English as a medium of instruction

Undeveloped strategies to cope with changing demand, increasing competition

Can we fix it?Can we fix it?

Good news: We have excellent, internationally connected and

benchmarked universities

5 of 8 (62.5%) of NZ universities in THE Top 500

Universities multinational, multicultural environments

Bad news: Global faculty shortage – salaries falling behind

Rising oil prices, environmental awareness may erode multinational staff and student base

The Bologna effect

Asian universities upgrading capabilities very fast

Asia-Pacific Top 40 (THE WUR 2007)Asia-Pacific Top 40 (THE WUR 2007)

16 Australian National University

17 University of Tokyo

18 University of Hong Kong

25 Kyoto University

27 University of Melbourne

31 University of Sydney

33= University of Queensland

33= National University of Singapore

36 Peking University

38= Chinese University of Hong Kong

40 Tsinghua University

So what can be done? – Earnestness 101So what can be done? – Earnestness 101

Understand our markets and the changing needs Understand our competitors

Build long-term relationships built on mutual benefit, not quick one-way gain

Celebrate and embrace internationalism NZ small trading economy, need to be internationally

connected to knowledge economy

Integrate international students – networks of the future

Use student exchange to create genuinely multinational learning environment

Align immigration policy (talent-seeking) and education

So what can be done? - Pragmatism 101So what can be done? - Pragmatism 101

What do foreign students want?

Can we profitably give them what they want, in ways that fit with our educational mission and tradition?

What do they want? Internationally portable (benchmarked, accredited)

qualifications that guarantee a high rate of return on their investment – global graduate employability

English medium of instruction

Multinational/multicultural learning environment

Membership of global alumni network

So what can be done? - Pragmatism 101So what can be done? - Pragmatism 101

Internationally portable qualifications: A coherent set of Bologna/US compliant Bachelors-Masters-

PhDs qualifications which facilitate student mobility

Clear position on T-people qualification structures – general UG to specialist PG or vice-versa?

Postgraduate coursework masters, especially in business and other professional areas – major growth area

US-style, scaleable PhD programmes, aimed at satisfying the ballooning demand for academically qualified faculty in Asia

So what can be done? - Pragmatism 101So what can be done? - Pragmatism 101

English medium of instruction √

Although foreign language provision in NZ universities declining

Contrast multilingual abilities of European and Asian graduates with NZ, UK and US

So what can be done? - Pragmatism 101So what can be done? - Pragmatism 101

Multinational/multicultural learning environment High % international students on campus ≠ multinational

learning environment

Integration and leveraging diversity in classroom key

Student and faulty exchange militate against passive client status of international students

Challenge staff out of comfort zones by international experiences

Reach out to local ex-patriot communities

So what can be done? - Pragmatism 101So what can be done? - Pragmatism 101

Membership of global alumni network Traditional strength of US and major business schools

Kiwi Ex-patriots Association (KEA) – Professor David Teece (Berkley)

Importance of network externalities

“Alumni most important stakeholders”

ConclusionsConclusions

New Zealand internationalisation was: Unintended product of a public policy change

Driven by developments in China

Mediated by agents, mainly into schools

Rapid, unmanaged and unsustainable

Finding our position in the new global higher education market requires: Understanding the changes taking place

Long-term relationship building

And especially, educational products and ‘after-sales support’ services which meet market needs