2005: The Challenges Ahead

International education in Australia in 2005 faces a tough year. The declining enrolments of domestic students and the decline in the growth of enrolments of international students presage a turbulent time for Australian higher education institutions.

According to the DEST data, domestic students fell by 1 per cent or 9,000 heads. On the international front, there was an increase of 6 per cent growth in the number of international students. However, this growth is modest compared to historical growth rates of 14.5 per cent (compound annual growth rate for the period 1997-2002).

So the 'happy years' of growth are over and they will seriously impact on the university business.

The crisis (aka “transition”) of IDP Education Australia can be taken as an example of what can happen to institutions and was canvassed in Blame it on Dollar? So higher education institutions will need to ensure their international education business activities are well positioned by being financially viable, customer and consumer-oriented, driven by sound planning, keeping up to date with monthly developments and marketing.

What we already know

Here’s what we already know about the international market environment. There will be increasing competition from Asian countries such as Singapore, Malaysia, as well as China and the Middle East. This will create a more difficult environment to attract international students to Australian shores (historically focused on the Asian region). European countries are now attracting record numbers of international students, given the tougher visa restrictions in the United States.

Germany, France, Belgium, Ireland, Netherlands, Switzerland are competing with Australia's international education industry. United Kingdom will continue with its marketing in Asian region.

The lure of transnational degrees

The rising interest in transnational programs also poses challenges for Australia. From an international student perspective, it poses another study option. It enables those in the countries where those programs are available, to access good quality of education, internationally recognised qualifications at a reasonable cost.

Why study overseas if I can study at home in a world-recognised institution in my home country? The implicit lure of permanent residency is always around. But it’s clear that DIMIA is awake to experiences overseas – especially the UK with faux enrolment strategies, and is likely to increase its checks. The indirect effect of this is to increase the appeal of transnational programs and avoid lengthy immigration requirements and increased living costs. 

On the other hand, Australian institutions that want to establish their presence offshore need to ensure the market and the costs and feasibility, to justify their ventures.

Nine Questions

Against this climate, the higher education industry needs to review its business models and identify how feasible they are in this increasingly competitive market.

Some questions to consider, are:

• Is the current business plan viable and realistic? 
• What are the contingency plans if it fails? 
• What growth rates do I expect? 
• What are the target markets? 
• What marketing investment do I need? 
• What resources will be needed? 
• What programs or courses are the most attractive to particular markets? 
• How can I ensure a sustainable growth into the future? 
• From where will my funds come?, and what will be the 'fund mix'?

So industry will need to become more business-savvy and professional.

Growth is still possible - but not by accident anymore. It will only come from realistic business plans, that include well-monitored implementation on at least a monthly basis.

Marketing intelligence and better understanding of international markets will be needed. It will be crucial, in a more competitive environment, to understand what those potential international students think or want, and how. In sum, no actions will need to be taken without proper market research and analysis. Marketing will be the keyword, and a more scientific approach will be the crucial.

In short, there will be no room for improvisation, or for enjoying 'happy growths' anymore.

Marcelo Follari
International Education Market Research Consultant & Contractor
10 Jan 2005