Global slow down: Implications for international student recruitment

International education is now Australia's third largest export industry. In 2006-07 the export market was worth a whopping $11.7 billion.

In an intensely competitive international market Australia is more than holding its own. We have the highest proportion of foreign students in our higher education system than any other country – at 19.3 per cent according to the OECD. The OECD average is just 7.2 per cent. Australia is now the world's fifth largest provider of education to international students.

The market for international education has been growing at a staggering rate. In a speech to the AEI industry forum in April 2008 the Minister for Education, the Hon Julia Gillard MP,observed that the world foreign student market was 600,000 people in 1975. By 2000 it was 1.8 million. And in 2005 it had reached 2.7 million – a 50 per cent increase in just half a decade.

Australia has ridden the wave. AEI data shows strong growth in in student commencements in most sectors in the period 2004-2007. Growth in the VET and ELICOS sectors has been particularly strong.

This strong growth has largely been fuelled by fed by rapid rises in economic growth and prosperity in our region.

What then are the implications for Australia's international education market of current global slow down? Will the strong growth continue unabated, will the trend level out, or will we see a substantial decline in international student numbers?

These questions do not lend themselves to a simple answer, and it is probably a case of "time will tell."

There are a number of competing factors at play. On the one hand sharp falls in world stock markets, and rising costs of living will make it much harder for many parents in key markets like China, India and South Korea to fund overseas study for their children. On the other hand research almost universally shows that parents in those key markets are generally prepared to do everything possible and are willing to make significant financial sacrifices to ensure that their children have the opportunity to gain a high quality education overseas.

The AEI figures for May 2008 paint a mixed picture. In summarising the data the AEI noted that "overall growth of full-fee international students in Australia remains strong. Markets such as India, China and Nepal have recorded strong growth in enrolments; however there wave been declines from major markets such as Japan, Hong Kong and Taiwan." The continued strong growth is encouraging and suggests a degree of resilience in the market, but are the declines the sign of the first cracks starting to appear in the trend?

We probably won't know the answer for a few months yet, and the outcome will depend largely on which way the global economy turns.