Last week, the Irish government announced “Investing in Global Relationships – Ireland’s International Education Strategy, 2010-2015“, or a “plan to lure international students“, as RTE so attractively put it. The plan has three key quantitative aims by 2015:
- To increase overall international student numbers by 50% to 38,000
- To boost the number of English language students by 25% to 120,000
- To increase from 23% to 35% the proportion of full-time international students undertaking postgraduate programs
Education as an export is huge business internationally – as discussed below, it’s Australia’s third biggest exporter – so it’s hugely important, now that the Department of Education has shed its mindset of “controlling the number of foreigners”, that Ireland get it right. Ireland’s brand new strategy, however, has received a mild response at best – see for example the post and comments on irisheconomy.ie. In his response, outgoing DCU President Ferdinand von Prondzynki is wary of numerical targets and the signals they might send. Key diaspora website, Irishcentral.com, was less than impressed with the overall strategy, believing the most significant outcome was that:
The Irish government is set to clamp down on international students who attempt to over stay their visas. Starting January 2011 the Department of Justice intends to impose strict regulations regarding the length of time foreign students can remain in Ireland.
This post looks at the long-term and short-term aspects of education as an export. Is this strategy a step in the right direction or does it miss important long-term opportunities? And could a well-thought-out strategy for education even help stimulate the economy out of recession?
Standing in New Zealand’s wake
Currently, there are about 25,000 foreign-born students in Ireland, a figure the Government would like to see reach 38,000 by 2015. Why the paucity of ambition, though? This is huge potential market: consider the UK forecast, made in 2004, that international student numbers would increase from 2.5 to 5.8 million by 2020. New Zealand has had “Education as an Export” strategies since the 1990s and is currently reaping the dividends. The contrast with Ireland could not be more striking. In 1998, less than 4% of tertiary students in New Zealand were foreign-born, while in Ireland, that figure was 5%. According to Education at a Glance 2010, almost 25% of students in New Zealand are foreign-born, compared to just 7% in Ireland.
New Zealand has managed to deliver 7.3 foreign students now for every 1 foreign student they had in 2000. Ireland’s lofty ambition is to try and have 2.6 foreign students in 2015 for every 1 it had in 2000. In other words, Ireland would like its market share to tread water. The chart below shows the ratio of foreign students for OECD countries in 2008 compared to 2000 (the percentage in brackets after each country is for foreign-born students in 2008).
It’s not just the paucity of ambition, it’s the lack of detail in the plan itself. Consider Australia, where one quarter of students are foreign-born. The Australian Bureau of Statistics valued education exports at €8.9bn, compared to tourism (which had exports of €8.2bn and ran a trade deficit, not a substantial surplus). This makes it the third largest exporting sector in the country, after coal and iron ore. In Ireland, not only do we not know how much education as an export earns the country, there is no plan to find out. The best the report can do, in relation to the immediate economic impact, is to state:
The total direct economic impact (i.e. tuition fees and living costs but without economic multipliers) is estimated at €682 million… A simple (and possibly conservative) estimate of indirect employment supplied to the Group suggests that 13 jobs are created for every 100 international students in Ireland.
And that’s it – no intention to find out more. This isn’t rocket science and the government needs to join up its various bits and pieces, like the CSO and the Department of Education and Skills, to get things done right.
The reason that the lack of statistics is a particular concern is because of the quality of the strategic objectives that are listed. It would be perhaps excusable if collecting statistics was squeezed out by more important goals. But it’s hard to think that the 10 objectives listed would pass the SMART test (i.e. that each is specific, measurable, actionable, realistic and time-bound). Consider these three strategic objectives, for example:
- “Ireland will enhance its performance through partnership and collaboration”
- “Government policies and actions will be consistent and supportive”
- “North-South and EU co-operation will enhance Ireland’s international education performance”
All noble ideas, certainly, but actionable? Specific? Measurable? Hardly. Unfortunately, we have a strategy for exporting education that says more about what Ireland’s diplomats will do on St. Patrick’s Day (three mentions in the report!) than on data-driven market intelligence.
Overcome Ireland’s shyness
It’s clear that Ireland is the shy kid of the Anglo-Saxon world, happy to hang out with its brothers and sisters but afraid to make new friends. About 40% of foreign-born students in Ireland are from our five Anglophone brethren (Australia, Canada, New Zealand, the UK and the US). In New Zealand the corresponding figure is just 20%. For Australia, Canada, the US and the UK, no more than 10% of students come from Anglophone countries.
What’s particularly telling is the contribution of India and China to the student populations of English-speaking countries. In the UK, one in five students is Indian or Chinese while in Canada, it’s one in four, and in the US, it’s as high as one in three. In both Australia and New Zealand, about 40% of students are either Indian or Chinese. In Ireland, it’s just 12%, the same proportion as Sweden and behind Denmark.
The lack of data analysis in the Strategy document shines through here. Somewhat amazingly, Ireland’s new strategy document singles out the US diaspora as a market for further tapping but fails to mention the world’s biggest student market, China, apart from a brief nod when discussing global trends, let alone South-East Asia, the Middle East or South America. We should learn from our older brothers and sisters and start making new friends fast!
Learning from the RCSI
The Royal College of Surgeons in Ireland (RCSI) has been in this market a long time, much longer than, for example, New Zealand. There are students from more than sixty countries in the college, with many coming from the Middle East. The rest of Ireland could learn a lot from how the RCSI does business. For example, Oliver Lyons (no relation) over on irisheconomy.ie has figures for student visa applications from 16 countries to Ireland and to the UK. They are based on FOI requests here that are compared with publicly available (sigh) information in the UK.
The overall refusal rate in Ireland for the 16 countries analysed was 29%, compared to 28% in the UK, so it doesn’t look like we slam the door in people’s faces (yet). However, the UK received 33 times as many applications as Ireland in total. Now, the UK is a bigger country than Ireland – but only 14 times as big. So clearly the UK is attracting more than twice as many applications per capita than we are, taking size out of the equation. We’ve got some marketing to do.
Digging a little deeper, the gap in visa applications is not equal across regions. For every student that applied to Ireland from six Middle East/North African countries (Libya, Turkey, Iran, Saudi Arabia, Kuwait and Bahrain), over 150 applied to the UK! What’s even more amazing is that the refusal rate in Ireland was just 5%, so clearly the candidates are of a good quality. But again, there is no mention of any Middle Eastern countries in Ireland’s new strategy.
This comes back to a root point about Ireland’s education system and the public service in general. A private institution like the RCSI is structured in such a way that when it sees a huge opportunity, like good quality candidates from the Middle East, it views it as actually costing money not to try and seize the opportunity. Ireland’s state education sector is currently not set up the same way. Prof. Brian Lucey, who runs Trinity’s M.Sc. in Finance, one of the few with CFA linkages, sees bureaucratic red tape and the funding structure of the sector as a whole, as a major stumbling block to capitalising on the opportunity of education as an export. As he says on irisheconomy:
One issue that strikes me is that at present we have an (imho incorrectly applied) Employment Control Framework on the third level. So, even self-financing courses cannot hire faculty to work on them, even on contract. I could see us expanding the MSc in Finance from 55 to 100+, if we could hire a couple more people. 50 times €15,000 [€750,000] is more than enough to hire two staff plus an admin and some left over for collegiate purposes.
Until very recently, the Department of Education had a target for foreign-born students – but the target was a maximum, not a minimum. It will take more than a strategy document to change the mentality of the Department and the whole sector into one that sees itself as a competitive indigeneous exporter, but as New Zealand shows, it can be done.
Could education help our economic recovery?
Clearly, exporting education on a large scale would boost college coffers. Suppose Ireland’s proportion of foreign-born students was brought in line with the UK’s over the next decade, meaning an extra 36,000 students enrolling. The back of my envelope tells me that this would be worth up to €500m in extra tuition income for universities. (I don’t think capacity would be that much of an issue either, as this would likely mean that the 15 larger institutes would take an extra 1,500 each while thirty smaller ones – there are over 60 higher education institutes in total in Ireland – would have to absorb an average of an extra 500 each.)
But education as an export has huge potential to drive Ireland’s wider economic recovery also. The benefits to the wider economy would be substantial:
- Between academic staff and support staff in the education institutes themselves, between 6,000 and 6,500 jobs would likely be created – this is based on the ratio of staff to students in the Dublin universities.
- New students will be travelling to and around Ireland, buying food, clothes and lots more, and will need places to live. Currently, according to the CSO, 100 people support 11 jobs in retail, transport and accommodation. If the new students only needed half that, that’s a further 2,000 jobs outside the education sector that would be created.
- Can you think of a better way of using our property overhang? With at least 100,000 vacant properties in the country, 36,000 extra students would use between 10,000 and 15,000 of our empty properties. Futhermore, they could be how we find a use for anywhere up to 6 million square metres of commercial property, if the Trinity ratio of 162 sq.m. of facilities per full-time student is anything to go by.
- That is of course before even considering wider benefits, like the research done by the newly hired academic staff, the new Irish diaspora created, multicultural benefits for the Irish population or the multiplier effects of their spending on the economy…
- Using the Australian figure of ~€20,000 in exports per student, by reaching targets of 87,000 foreign-born higher education students and 130,000 English language students (which I’ve left out for reasons of space), education in Ireland could become an indigenous sector with €4.3bn in exports. For comparison, agri-food and financial services will both generate about €6bn in revenues this year, tourism about €2.5bn.
These are all surely very good reasons why we should seize the opportunity of education as an export. However, Ireland needs a more ambitious strategy that is realistic and data-driven.