Global Education Market Presentation To International Forum On Investment In Higher Education Washin

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Global Education Market Presentation
ToInternational Forum On Investment
In Higher Education

Washington DC, 22 January 2004

• Ron Perkinson
  International
  Finance Corporation
  Health Education
  Department
  www.ifc.org / www.ifc.org/edinvest

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The Global Market

• 2.2 trillion total
  one third of market in
  USA
  approx 15 only in the developing world
• Teachers 5 of global labor force
• Primary Secondary Education
  substantially
  public funded
• Tertiary Adult Education
  changing
  landscape - free provision diminished
  regulatory -
  governments more liberalized
  private sector participation
  growing (est 17)

Sources Merrill Lynch 2000 OECD 2000 World
Bank IFC
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Students Studying Abroad

• Over 1.6 million international tertiary students
  abroad in OECD countries (est 30 billion market)
• Over 580,000 in USA 2001/02 or around 35 of
  OECD total (6.4 inc from Yr 2000)
• UK had 14 of OECD total in 2001 students from
  China increased by 67 from previous year 31
  increase from India
• Other significant OECD share Germany ( 12 )
  Australia ( 10 ) France ( 8 ) and NZ ( 5
  )
• ERASMUS program over 120,000 students a year

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International Students Big Business

• Australia
  
  160,000 foreign students in Yr
  2001 growing to 560,000 by Yr
  2025 double again in distance programs
  50
  from Singapore and Hong Kong are distance
• of Total Exports
  
  11 and 4 respectively of
  Australia and NZs in Yr 2000 3.5 and
  3.2 respectively of US and UKs
• China
  
  44,700 foreign students in Yr 2000
  of which 70 from Asia
  
  12 from Europe 11 from the USA

Report commissioned by IDP Education Australia
China Education Yearbook, 2002
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Enrollment in Private Higher Education (as a of
total)

Latest Internal ADB est YR 2001
Sources IBRD/IFC UNESCO 2000 OECD 2001 Levy
Research on Private Higher Education April
2002
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Medical Schools growing private

• Recent growth in medical schools
  
  greater proportion private
• Globally 1300 in 1995
  
  today nearly 2000
• 260 medical colleges in India
  approx
  30 are private
• Private medical schools also growing in Malaysia,
  Thailand, Middle East, LAC and Former Soviet Union

Sources Chronicle July 2003 IFC
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World Population Growth
Source 6 Billion Human Beings - Musée de
l'Homme Muséum National d'Histoire Naturelle,
Paris France
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Balancing Education Sector Needs . . . .
. . . . With Fiscal Realities

• Economic decline available resources for
  education shrink
• Governments reconciling and balancing education
  fiscal realities and demographic trends
• Supplementary costs shifting to parents and
  students
• Tuition fees increasing globally 

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Trends in Public Private Financing
Education Global Estimates - All Countries 1996
to 2000
87
83
Public investment
Private investment
17
13
Source OECD 2000 UNESCO 1999 IFC staff
estimates 2002 est. Trends in
Private Investment
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Trends in Private and Public Investment In
Developing Countries 19702000
14.65
Private investment
Public investment
7.05
Source IFC 2000 Trends in Private Investment
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Global Giants Lack of Supply
in the worlds most populous countries
China

10 to 11 gross enrollment

Yr 2000 7.2 m students enrolled (excluding
distance)
admitted 2.2 m new students
in Yr 2002
26 m students currently in high
school
15 m students to enroll
over next 4 years India


6 gross enrollment

10,900 HEIs (includes 237 Deemed Universities)
over 8 m students
enrolled
some programs - 5000
applicants per place
Sources Unesco 2000 India Planning Commission
Report 2002 China Dept of Statistics 2002
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Funding Comparatives
. . . the most populous nations
Sources UNESCO 1999 2000 World Bank 2001 US
Department of Education 2001 Department of
Education Skills UK, 2002
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Student Financing

• Over 60 countries have student loans mostly
  public schemes
• Variable performance
• Loan schemes important can improve access and
  opportunity
• Some barriers
  
  private banking sector experience limited
  cost of
  credit usually high
  mobility
  of students after graduating
  
  underwriting risk and cross border issues
  difficult
• Access to proven systems experience valuable

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Higher Education the perfect storm
. . . the six
converging forces of change

• The increasing importance of knowledge
• The further impact of globalization
• The impact of increasing competition
• The continued impact of internationalization
• The continuing Information Communications
  Technologies revolution
• Decline in public financing sourcing
  alternative financing

Source World Bank Constructing Knowledge
Economies 2002 The Changing Enterprise ACE
2002 IFC
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Accreditation Quality Management

• Accreditation
• 80 countries with accreditation systems
• Sets minimum standards
• Level playing field important commercial
  stability
• Quality
• Increased attention to QMS
• Growing awareness of co-op regional initiatives

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. . . . GATS . . .

• 144 countries trade in higher education services
• Raise Barriers or Limit Entry?
  
  entry of foreign providers in to local
  markets - or
  limit how foreign providers operate in domestic
  markets
• Issues of IP and equal treatment of national
  and foreign providers on education subsidies

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Changing Business Models

• Changing modus operandi Public goes Private
  new forms of competition
• Shift from venue-driven to market-driven
  delivery systems
• Market demand for flexible delivery options
  (evenings weekends distance learning use of
  new learning technologies)
• E-learning - investment confidence and sector
  growing 
• From isolated university models to linked HEI
  courses QA and credit transfer
  systems
  broader options and
  career pathways
• Separation of institutional management and
  academic power of faculty different control
  over business administration

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Lifelong Learning
Changing Student Profiles

• Adults with tertiary qualifications increased
  from 22 to over 40 today in OECD countries
• Over 40 of undergraduates in US 30 of
  Canadas undergraduate students are over 25 yrs
• Yr 2000 over 20 of first year university
  students were over 27 yrs in Australia, NZ,
  Denmark, Norway Sweden
• Lifelong learning attracting new learners more
  diversified older and part time students

Sources OECD 2000/2001 The Changing
Enterprise ACE 2002
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Faculty the ageing workforce

• By Yr 2010 as student demographics increase
  
  growing competition looming for Scholars
  
  increasing global pressure on staffing
• Canada, 33 of faculty over 55 years 50 are 40
  to 54 yrs
• USA, 30 are over 55 years 27 are 40 to 54 yrs
• Impact on developing countries potential brain
  drain
  higher salary incentives
  elsewhere
  
  loss also to private sector

Source The Brave New World of Higher
Education Madeleine Green, Peter Eckel ACE
Andris Barblan EUA 2002
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Distance Education

• Asia has 3.5 m students (2000) China Central
  Radio and TV University has 1.5 million enrolls
  over 100,000 each year
• 30 of all tertiary courses in Russia are
  distance
• LAC has over 1 million tertiary distance
  education students
• Technikon South Africa has another 60,000
  students
• The E.A.D.T.U. 18 members 14 countries
  900,000 students
• Canada 500,000 students many on-line
• British Open University 154,000 students
  produces 9 of all undergraduates at 5 of
  national university budget

Source The Changing Enterprise ACE 2002
World Bank IFC
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On-Line Education steady growth

• Many On-Line players
  some
  operations are in good health and growing
  (Bilgi
  University and RMIT)
• Yr 2002, 19 of corporate training in US was
  on-line up from around 7 three years earlier
• 150 billion industry by 2025

Sources IDC IFC2002
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The Parallel Training Universe

• New players in higher education offering
  education and training in more advanced
  technologies.
• Global I.T. companies / I.T. training providers
  (NIIT SSI/Aptech) operate outside certified
  higher ed credentials and accreditation but
  some affiliations
• In Yr 2000, global I.T. companies certified 1.6
  million students worldwide with 2.4 million
  certificates in Information Technologies.
• Cisco provides certificated training for 400,000
  students in 150 countries

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Future Outlook

• Financing of education will tighten
  demographics outweigh fiscal realities growth
  in non-public financing
• New business models Public going Private
  trend will grow
• Knowledge societies and lifelong learning
  important for economic development new systems
  for education and trg
• Globalization and internationalization changing
  the future landscape of higher education,
  national and cross-border
• ICTs and the Internet optimizing use of new
  technologies models advancing quality-based
  mass education delivery

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There is nothing permanent . . . except change

Heraclitus