Submission to the Review of Higher Education Financing and Policy
INTERNATIONALISATION OF HIGHER EDUCATION
Australian International Education Foundation Council
This submission focuses on the international dimension of the provision of higher education in Australia.
In terms of the five key themes identified by the Higher Education Review Committee from its Terms of Reference, this submission deals mainly with the role of higher education in Australia's economy, factors affecting demand for and provision of higher education over the next two decades, and implications for financing of higher education teaching and research.
The AIEF Council makes the following key points in this submission:
Back et al (1996) have defined internationalisation as " the process of integrating an international/intercultural dimension into the teaching research and service of an education and training institution". Internationalisation involves ensuring that:
Australia's involvement in international education and training has progressed through three main stages over the past decade: aid, trade and internationalisation. During the aid stage (prior to 1986), the significant majority of overseas students in Australia were fully or partly subsidised by the Australian Government under foreign aid programs. The focus moved to trade from 1986 when Australian education and training institutions were permitted to offer places to overseas students on a full fee basis. The policy focus has now shifted from trade to internationalisation, recognising that the benefits of international education and training go beyond direct economic considerations and that internationalisation of education is fundamental to our social, intellectual and cultural enrichment and strategic engagement with other countries.
The benefits of internationalisation are now well recognised in Australia. These benefits are seen generally in terms of economic growth, labour market demands, international relations, intercultural knowledge and skills, financial incentives for institutions, and increasingly the impact on quality assurance for all stakeholders:
The demand for education and training services as a requisite for economic growth has never been greater. Globalisation means world markets are becoming increasingly competitive, putting governments and industries under growing pressure to respond. Education and training requirements vary from country to country and are influenced by a variety of factors, including a country’s stage of development and its political and economic aspirations.
The competitive pressures that drive the search for continuous improvement are also pushing out the boundaries of globalisation which drives the need for internationally competitive workforces. Australian universities are responding to the dramatic growth in the demand for quality education and training services as reflected in the growth of Australia’s student education exports.
For 1994 education exports were $2.1 billion, in 1995 they were $2.5 billion and in 1996 they were estimated to be $3 billion (ABS, 1997).
Trade in education and training services represents a major global market. A 1995 UNESCO report estimated that globally, 1.4 million university students studied outside their home countries and the number increases each year. Australia’s estimated share of this market in 1994 was around 3%.
Past growth indicates that the industry will continue to grow. The number of students studying in Australia is expected to increase by over 50% from 143,000 in 1996 to 220,000 in 2001. Higher education will continue to be the dominant sector but strong growth is also likely to occur in the vocational education and training, ELICOS and schools sectors.
Growth over the next five years in traditional education and training markets and services is projected to continue with opportunities emerging in new geographic markets through a diversification of services.
While a demand for university places in Australia is likely to be maintained, universities will need to develop their capabilities for delivering programs in response to a worldwide demand for continuing professional education. Offshore delivery of services offer similar gains as countries’ programs for rapid development and structural reform run into critical skills shortages. At the same time greater leisure and economic growth will support increasingly accessible international travel making study tourism a growth area.
Application of new technologies for delivering international education and training services is in demand and countries are increasingly pursuing foreign investment in education and training through twinning programs and establishment of offshore campuses as they build their own in-country education and training infrastructure.
Exploiting the global demand for education and training services will require a sensitivity to the different needs of each industry sector, and to the realities of trends in each source country. More Australians studying and undertaking research offshore will also contribute to Australia remaining an international leader in education and training.
The growth in higher education international students will be from the ASEAN countries and North Asia (Taiwan, South Korea and Japan). Very rapid growth for higher education is predicted in South Asia (India, Pakistan, Sri Lanka). Australian universities will however need to actively diversify; they currently are too concentrated in countries where Governments have policies of slowing the flow of their nationals overseas; they offer too many undergraduate programs and too few postgraduate places; and their international courses are mainly concentrated on accounting, economics, business studies and applied science.
Offshore delivery is starting from a low base, but there is room for significant growth for the higher education sector.
The following table summarises the potential value of education and training market for the higher education sector by the year 2001 which is estimated at $2.3 billion.
Table 1. Projections for the Higher Education Sector in 2001
| Student numbers in Australia by 2001 | 80,000 |
| $ value of onshore delivery (per annum) | $2,250m |
| $ value of offshore delivery (per annum) | $60m |
| Potential Value by 2001 ($/annum) | $2,310m |
The higher education sector currently earns approximately $650 million in student fees and the AIEF has estimated that this could grow to approximately $1,050 million by 2001. Estimates beyond 2001 have not been made due to the difficulty in predicting market conditions that far into the future.
Australian universities face the following external challenges:
For example, while anticipated strong economic growth in the Asia Pacific region of 9-20%, will ensure continued strong demand for university places from the Asian region, source countries are developing their own education and training systems to meet domestic demands. At the same time dynamic growth in the Asia Pacific region is attracting increasingly vigorous competition from established competitors as well as from regional competitors such as Malaysia. The UK, for instance, is establishing distance education centres to expand its market in South East Asia.
Australian universities also face domestic challenges:
- distance education
- converging technologies
- offshore delivery; and
In brief, as the international market changes and develops over the next five years, Australia’s universities will be faced with intense competition from rivals, equally as determined to capitalise on a profitable market.
There is a line of thought that, in the face of declining financial support from government, international education provision will provide universities with an endless source of future income. In the face of recent Government decisions to reduce future funding to universities there has been an expectation that institutions will make up shortfalls through increased recruitment of fee-paying international students. Such optimism ignores the range of supply, demand and competition factors outlined in previous sections of this submission.
It also assumes that current earnings from the provision of education services both here and outside Australia has a substantial retained income component. It appears, however, financial benefits to universities are severely constrained by their need to set fee levels marginally above costs in order to remain internationally competitive.
While it is highly likely on our analysis that universities will continue to expand the number of international students, it is unlikely that they will all be able to generate significant surpluses from such activity in order to fully compensate for declines in government funding. What is more likely is that a few universities with high international profiles and international student numbers will be able to generate leverage from their activity to finance capital works and employment of staff - there is some evidence that that has occurred already (Baker et al, 1996) - but many institutions without current high international exposure will not be able to do so, at least in the short to medium term.
There also are increasing risks for both institutions and governments of the forecast future trends which will see Australian universities seeking to develop off-shore campuses and distance education facilities. Universities increasingly are entering into joint venture arrangements with other overseas institutions or property developers , or seeking to raise funds to develop their off-shore infrastructure. There are considerable risks both to universities and government from such ventures should the unthinkable occur and a venture fail. Given that some institutions have limited alternative sources of income to government funding, there may be a tendency to take undue risks.
A university getting into a difficult situation like the one faced by ELICOS colleges in relation to Chinese students after the Tiananmen Square saga could create serious problems for the Australian government. In particular, the higher education sector will need to develop increasingly sophisticated approaches to international financial arrangements if their expansion offshore is not to put their onshore activities at financial risk.
Current policy frameworks
The entrepreneurial efforts of the higher education sector have been instrumental in the internationalisation of education in Australia.
The role of universities initially comprised the provision of courses to overseas students within the framework of Australia’s aid program. Subsequent policy changes facilitated competition among education and training providers to increase their export performance, particularly but not exclusively, in relation to full-fee paying students.
The introduction of a more commercial or market oriented approach by Australian universities saw the industry focus more clearly on the needs of the client. In adopting a more client oriented approach the higher education sector moved to increase the range and quality of services that were offered by Australian institutions. Institutions introduced a more internationally oriented approach to their services particularly with respect to curriculum, teaching methods, research and student services. The industry established staff and student exchanges, cooperative agreements with other international institutions, twinning programs, training co-operations, licensing and franchising arrangements, international degrees, offshore campuses, and distance education.
The higher education sector increasingly refined its approach to market development and its commercial practices. This included:
Although education and training services have in the past been regarded wholly as a public good rather than a marketable commodity, universities have been instrumental in developing both aspects of the industry. Individual institutions have actively promoted the cultural, socio-economic benefits of international education and training. They have also increasingly adopted a business-like approach to their engagement in international activities with a view to generating additional "export" income for their institution. In this context they are no different to any other industry and have exhibited normal business practices including the development of:
It is clear from the above summary of current frameworks that internationalisation is now part of the Australian university system. As Back et al (1996) put it, there is considerable "systemic strength" in the internationalisation of Australia's universities.
Future policy frameworks
In response to the emerging global realities universities will need to reformulate their mission, create new policies, develop new strategies and adapt their management, programs, curricula, delivery systems, pastoral care and quality assurance mechanisms if they are to avoid insularity and achieve genuine internationalisation.
While universities already have extensive international education policy frameworks (Back et al) we expect that they will come under significant pressure to continuously:
Quality assurance
Advances too will have to be made in applying the principles of transparency, comparability and convertibility to both voluntary and mandatory systems of regulation. (Mallea, 1997). Quality assurance systems will need to be strengthened and the international dimensions addressed.
In particular, Australian universities are increasingly engaged in delivering higher education programs offshore. While Australian universities have highly regarded and comprehensive quality assurance procedures and policies in place for their activities in Australia, there has been no public scrutiny of the quality of Australian universities' offshore provision. The Higher Education Quality Council of the United Kingdom has produced a code of practice for overseas collaborative provision in higher education as a first step in assuring quality provision offshore by UK universities. The code deals with aspects of collaborative partnerships which have a direct or
indirect bearing on the quality and standards of educational programs and awards provided overseas. Areas covered by the code include:
It is expected that Australian universities will increasingly look to expand internationally through an increasing array of collaborative arrangements in order to maintain the quality of their education and research programs. With the encouragement of the Australian Government, the AVCC has developed a code of ethical practice in relation to offshore provision of educational services. This code however may now need to be reassessed and updated to take account of the rapid development of Australian higher education institutions' offshore expansion. In particular, the code provides limited capacity for sanctions in relation to institutions which break the code of practice. The absence of active regulatory capacity could lead to demands for public scrutiny should there be significant breaches of the code without the higher education sector being in a position to apply sanctions to its members.
Student mobility
While Australian institutions have been remarkably successful in international education and Australian students have benefited from both improvements in curricula, accountability of teachers and the provision of pastoral care, they have not yet had the full benefits of internationalisation of education. In 1996 143,000 students came to study in Australia - with over 53,000 in Australian universities. Conversely only 43,000 Australian students studied abroad (based on the ABS 1997 figures for Australians whose principal reason for departing Australia in 1996 was for the purpose of education). Australian universities have 1,900 agreements in place with overseas institutions
with another 300 being negotiated. Of those in place, 1,500 include either study abroad arrangements or student exchanges. The remainder cover staff exchanges, and academic/research collaboration only.
The Australian government with the support of the AVCC has seeded through University Mobility in Asia and the Pacific (UMAP) a number of staff and student mobility schemes. UMAP is a higher education staff and student exchange programme under which students receive credit towards their degree for study undertaken at an overseas institution in the Asia-Pacific region. It was an initiative of the Australian Vice-Chancellors’ Committee (AVCC), and many of its counterparts in the region, to improve the quality of higher education.
In 1993 the Government established an Australian UMAP which provides seed funding each year to allow Australian universities to establish UMAP exchange programmes. Since that time a further five programme rounds have been advertised, 120 grants have been made to establish new student exchange programmes, and 952 Australian students have received a contribution towards their costs of study overseas.
Other government programs facilitating student mobility include Overseas Postgraduate Research Scholarships (totalling $15.2 million in 1996) awarded to international postgraduate students to study at Australian universities. The Australian Research Council (ARC), in support of its Reciprocal Research Award Agreements with its counterparts in France, Germany and Korea, funds International Research Fellowships. In 1996, 31 of these Fellowships were funded to a total of $1,480,000.
Increasingly, Australia is part of a global village and graduates from Australian universities will be employed in professions having international dimensions. Acquiring skills in working with people from different cultures will be an essential part of the preparation of new graduates. There are several ways of developing these skills, including:
While the internationalisation of curricula and interaction with international students will make a significant contribution, one of the major challenges to higher education over the next decade will be to extend the vision of Australian students and to truly integrate their course offerings in ways which will enable young Australians to participate actively in international education.
It is unlikely that either the Australian government or the universities will be able to finance large numbers of Australian students to study offshore. Universities will need to encourage the largesse of the private sector and the development of funding schemes to finance such growth. At the same time there are large numbers of scholarships on offer around the world which Australian students could avail themselves if they knew about them. One of the simplest initiatives which could be taken would be to collect and publicise the availability of overseas scholarship programs to Australian students at key points in the academic cycle.
It is also probable that insurance and other savings schemes will emerge, in response to the introduction of full fees for Australian students, to enable parents to save for the education of their children at Australian institutions - it is likely that as parents begin to establish such savings programs they will also begin to weigh up the costs and benefits of a higher education onshore and offshore. Such savings programs are well established overseas. The higher education sector will need to consider collaborative arrangements with the banking and insurance industry to develop similar savings instruments here for the funding of domestic and international education for Australian students.
It is noted that in countries with fairly advanced policies which support internationalisation of education, and in particular, the acquisition of internationally portable skills, higher education students have available to them loans which enable them to undertake both in-country and out-of-country study programs. In this context, consideration will need to be given to the role of Higher Education Contribution Scheme in enabling Australian students access to study at overseas institutions as an integral part of their Australian education. Some early signs of this development are occurring with Australian institutions offering programs to students at their off-shore branch campuses. These arrangements may need to be extended in the future to facilitate a wider international participation.
Articulation and Pathways
Another important dimension of student mobility is the ability to move across sectors, especially between vocational education and training and higher education sectors. Increasingly, the boundaries between these two sectors are blurring: vocational education and training is no longer the exclusive domain of the VET sector. Similarly, university education no longer represents the apex of a learning path. Many students need to top up or complement their university education with a vocational course. The concept of lifelong learning which has been adopted by educational institutions all over the world also reinforces the blurring of boundaries between sectors.
Cross-sectoral articulation has important implications for recognition of prior learning, accreditation of academic credits, and quality assurance. At present aggregation of credits operates mainly at institutional level although more and more institutions are entering into arrangements for inter-institutional credit transfer. More work needs to be done in the area of flexible, cumulative credit systems as they enable students to put together various combinations of course credits which can be transferred between programs and institutions both nationally and internationally. As Mallea (1997) points out, credit systems promote student mobility and can also be employed in the context of work experience and continuing education programs. In order to gain maximum acceptability, credit systems must meet the three major principles of quality assurance in education: transparency, comparability and convertibility.
Convergent Technologies
The use of technology, or more specifically the convergence between information technology and telecommunications, is seen by many as a possible solution to many of the issues facing higher education in terms of making it more effective and more efficient. It has been noted in many papers (AVCC, 1996; Alexander and Blight 1996) that the impact of technology is seen as a watershed that is equally as important as the invention of writing or the origin of the press. We are now entering the information age that is characterised by the electronic transmission of information and it appears that information technology has the potential to individualise education and to provide it almost anywhere and at anytime. Recent papers (Alexander and Blight 1996) have indicated that the integration of information technology has the potential to change the way in which courses are offered and a radical re-definition of the way in which teaching and learning takes place.
Developing a capacity to deliver courses internationally is critically important to the higher education sector. The possibilities for information technologies to deliver international education are also appealing because of Australia’s geographic isolation.
Australia is already a major contributor to the development of information technology in international education and this reflects Australia’s higher than average adoption of new technologies. However, Australia is not alone in its desire to utilise information technologies to deliver education at an international level. Overseas universities are forming alliances among themselves and with other educational providers (eg The Western Governors University in the USA) to develop ‘virtual’ universities. The Mind Extension University, owned and operated by cable television company Jones International limited offers undergraduate and post-graduate degree programs through alliances with established universities. The entertainment industry is also involved in education provision with World Learning Network, a collaboration of between Enigma Productions, the BBC, the British Council and the Open University being a good example.
A major challenge for universities over the next 5-10 years will be to effectively infuse information technology into the teaching/learning process for Australian and international students. While this will not be an easy task, issues that will need to be considered include: the adequacy of student facilities and teaching staff and support services as well as the availability of suitable software. Strategies will need to be developed to ensure that Australian students benefit from the changes in technology which provide opportunities for virtual international mobility, enabling vicarious travel by students and teachers and allowing access to best practice in distance education and lifelong learning.
Student support and pastoral care.
The internationalisation of higher education has added important new dimensions to the range of support and pastoral care that Australian universities provide for students. The need to support international students in coping with cultural and social adjustment, in meeting their needs of religious observance, in fostering links with Australian students and the broader community, and in dealing unfamiliar accommodation, transport, food, budgeting, health care, and other arrangements, has been recognised and addressed by universities.
Most universities now have specifically designated International Student Advisers on staff. There is a national Association of International Student Advisers with a vigorous program of professional development, aiming to make this area of servicing Australia’s education and training industry an international best practice benchmark.
More than a decade of responding to the non-academic needs of students coming from a wide variety of offshore locations has given Australian universities an ability to project important competitive advantage internationally in the area of non-academic support and pastoral care. There is an emerging view that competition for international (and Australian) students will increasingly expand from quality of education to include quality of experience and service.
For Australian universities to achieve internationally competitive standards in support services to international students there will be a need to cooperate nationally to:
The role of government in the past has been to provide the policy framework within which universities have been able to pursue, largely unfettered, the international education activities. The Australian government has provided some limited catalytic resources and research funds to facilitate the development of international education.
It is unlikely in the current circumstances of financial restraint that the Australian Government will be able to provide what are rapidly becoming very marginal funds to catalytic programs such as awards, exchanges and institutional links.
Nevertheless, there remains a critical role for the Government in the internationalisation of education. There are a number of areas where Government support for the providers of education and training can add value or lead to improved outcomes above those which might be achieved through the institutions' own efforts:
Alexander, S. and Blight, D. (1996), 'Technology in International Education', http://www.opennet.net. ... erence/idp/blight.html
AV-CC (1996), 'Exploiting Information Technology in Higher Education: An Issues Paper'
Back, K., Davis, D. And Olsen, A. (1996), Internationalisation and Higher Education: Goals and Strategies, Department of Employment, Education, Training and Youth Affairs, Canberra.
Baker, M., Creedy, J. and Johnson, D. (1996), Financing and Effects of Internationalisation in Higher Education: An Australian Country Study, Department of Employment, Education, Training and Youth affairs, Canberra.
Kearns, P., Johnson, R. and Milligan, B. (1994), Targeting University Research Links with Asia: Report of an Evaluation Study of the Targeted Institutional Links Program, Department of Employment, Education and Training, Canberra.
Mallea, J. (1997), 'Internationalisation of Higher Education and the Professions', paper for the workshop on Professional Services, OECD, Paris.