The educational export industry sector in Australia

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Education export is one of the industry/sector which is historically dominated by the USA and UK. After September 11, attack on World Tread Centre (WTC), Afghanistan war and after dissolving Soviet Union parliament in Dec 1991 Australia formed an educational export consortium. The growth rate of educational export sector of Australia in 1999-2005 is 175% whereas UK and USA 48% & 47% respectively.

There are other factors also favored Australia (Victoria, Melbourne) became an educational cluster such as geographical position on the map which is closer to the countries from where the largest number of students migrates for higher education such as India and China. Secondly, Australia's native language is English which are favorable factor and Government policy and support to promote the sector to boom and compete with other leading educational export countries.

As the educational export sector growth speedily in Australia and formed an educational cluster in Victoria, Melbourne. "Education services ranks as the third largest export category earner for the year 2007-08, behind coal and iron ore. Education services include expenditure by students in Australia ($13.7 billion) and exports from other education operations ($438 million)". Victoria, Melbourne which is a higher educational cluster in Australia. Millions of students come across the world for higher education and students stay average 2-4 years. "Each international student (including their friend and family visitors) contributes an average of $28,921 in value added to the Australian economy and generates 0.29 in full-time equivalent (FTE) workers (Table B). Overall, this sees international students, and the associated visitation from friends and family contribute $12.6 billion in value-added. This is based on student expenditure of $13.7 billion and visiting friends and family expenditure of $365.8 million".

Currently, a lot of internal and external challenges face by the Vitoria and Australian government. Number of international students increasing across the world for higher education in Australia (Victoria, Melbourne) and there are new challenges encounters by the Government authority and the visitors time to time.

Current challenges for Victoria government

Internal challenges


"In June 2007, there were 392,095 international students studying in Australia. (DEST, 2007) International student enrolments are increasing by almost 10% each year across most sectors excluding Elicos and VET with almost 40% growth in the last 12 months. (DEST, 2007) Rental statistics released by the Real Estate Institute of Australia in December 2006 revealed that the vacancy rate in Melbourne was as low as 1.7% which is well below the average vacancy rate of 3%, indicating a strong demand for rental accommodation. (REIV, 2006) The growth in student accommodation has been primarily to meet the housing needs of international students."

"The students were asked if they were satisfied with their living arrangements revealing that 82% of international students were satisfied with their current living arrangements, a result supporting Rosenthal et al, (2006) who found similar results in a study of Melbourne University students." The research outcome looks good to submit the report to the government or publish the report on press to attract the foreign students. In reality, the situation is different; an international student struggle initial 12 months to get a good reasonable residential accommodation in Victoria, Melbourne.

On first arrival, temporary accommodation is too expensive for an international student until they get a permanent accommodation and all students can't afford.

Majority of the students are living in living rooms or sharing bedrooms as they can afford according to their budget and they have to sacrifice their privacy and always worried about personal security and personal belongings. It cannot imagine for an international student who never live in this situation before.

An unsatisfactory living circumstance leads to leave the accommodation and finally loosing of advance lease agreement fee.

Unnecessary harassment to update address and submission of lease documents to the Government agencies about the changing of accommodation.

Sometime students have to buy furniture which is not provided in rental house.

Part-time work:

"Study and work" in Australia (Victoria, Melbourne), which attract and appreciate by the international students. All international students are not financially sound to bear the whole course fee so "study and work" is a good attraction for many of international students and that why a large number of students choose Australia for higher education. On other side all the nations don't allow student to work while holding student VISA.

"A study finds that 57% international students were employed at the time of interview and for one third works was the main source of income". It is also stated that 10% of international Chinese students in Australia (Victoria, Melbourne) have server financial problems and they have to work to continue their study as they cannot afford the fee.

This is a good initiative by the Australian government to attract the international students so that they will continue their study while legally work on part-time basis on weekends and during holidays. This is a very good strategic move to engage the youngster otherwise they will start illegal work to earn money or during free time might be engage with unsocial activities.

All students are not very fortunate to get good part-time jobs. There are lot of case comes in the limelight that the employers are underpayment the international students. Students have to travel far from the university campus or from the residence to work and results longer travelling time and shorten work-time. Due to long travelling distance the travelling expenses goes high and saving is very less. Due to long travelling time they get physically tired and having difficulties to complete the assignments due to lack of time or absent from class. Security is another concern for the students who comes late from the work. The students are also abused in their workplace by the customers.

A large group of students who belongs from Asian countries and their 1st language is not English so they have difficulty to understand the Australian dialogue and they don't get work in Australia (Victoria, Melbourne). Few students need extra time to meet the standard of Australian education and to complete the assignments in time. Few students unable to work-part time because struggle to maintain the pace of the study.

Language barrier:

In Australia (Victoria, Melbourne) majority of the international students comes for higher studies from Asian countries where English is not their 1st language and sometime their whole education was in their mother tongue. Their English language is not comparable as Australian. Whereas in Australia English is their native and official language. Even after getting admission in Australian universities international students has been face challenges to understand the dialogue and lectures. They have difficulties to keep the pace of the study and results are not good. They start failing the exams and the attendance in the class is less due to language barrier. They also cutoff with their friends, society and start living lonely which leads to physiological problems.

Some students went to depression and their educational career in danger. There are some suicidal cases also noticed due to failure in the exams. Few students have to lose their VISA due to irregular in the class and involvement in other unsocial activities. The students have difficulties in getting around due to language barrier and they don't get benefits of the government initiatives and the support system provided for them.

Cultural shock:

Lot of times Muslim women's were assaulted due to wearing 'hejab' and Sikh males for 'turbans' and they are under pressure not to use or look different from others. The first experience in Australian territory's airport is also not very pleasant for lot of international students. They are examined for long hour and some racial comments passed on them. Similar experiences in the Immigration department. All these incidents create an emotional hole in the students and affect their educational career.

"I hate the Immigration Department. It really freaks me out, seriously. What I feel is that the people in the Immigration Department, they just want to find some reason to send a student back to their place. That's what I feel. Other international students feel the same. Whenever I have been to Immigration and have had to get the visa extended, their faces are horrible, they've got this look on their faces…like as if they've got some plan in which they would take students directly to the airport and deport them (male, 23, business, India)".

Cross culture relationship:

Preparation of the society to accept the international students is very important as same as low and order. Government is not going to encounter face to face with the students every day. Whereas the general people face to face every day with the students in the college, public transport, hospitals, market, shopping mall, restaurants and so on. It is very important for international students that the common people will accept them in the society so that they enjoy staying there while feel safe in the society.

The local students may create a great role to accept first the international students. Their friendship may give confidence and psychological support to the new international students. But in reality the local students meet every day with the international students in the classroom but the local students are isolated with their own group of local students. Its only limit to 'hi-bye' between the local and international students in the campus and off campus there is no social communication between them. The isolated friendship between the local and international students limits exchange of their value, believes and cultural difference. There is no better understanding between the local and international students so the relation is very weak.

Recently, local students' attacks on Indian students in Melbourne and few students lost their lives, few hospitalized and few left country. Racial comments on the students are very common on public places and all this incidents create a loneliness environment for the students. It took big racial and political conflicts inside and outside the national. It direct affected the educational industry of Australia and slowdown the export.

"There was one incident that I'll never forget. It happened to me when I was up in Melbourne, in my first six months here. I was at the South Yarra train station. I was standing next to this woman, and she turned round to me and started abusing me. 'Why don't you just go back where you came from, we don't want you here!' It really took me aback. It was the last thing I expected… I felt blind… I was walking into town… I just carried on walking. It was so embarrassing. Ever since that, I've been more conscious about being different, about my colour, my nationality (female, 22, business, Zimbabwe)"

Employment and Outsourcing:

A large no of international student choose to study in Australia because they want to stay there for an employment, bright future, carrier and better life for their family. During the economic downturn in 2008, lot of companies and industries closed or migrate to the other countries for cheap operating cost or reduced the no of employees in Australia. So the unemployment rate increased during the recession. A large number of local residents are unemployed and few Australian also lose their job in overseas and return back home. It was difficult time for the foreigner to get employment after complete their education. Majority of foreign students return home after complete their education in Australia (Victoria, Melbourne). Employment attracts the international students; rate of employment decreases in Australia which direly affected the enrollment of students.

Currently, most of the companies from developed countries prefer outsourcing from the developing countries such as China, India and Brazil etc. to improve the profit margin and basically the company focus on product designing (R&D) and marketing instead of production. The multibillion multinational industries moved to another country and provide the employment opportunity to those countries from where the students migrate to Australia (Victoria, Melbourne) for higher education.

A large number of industries and companies move to another countries it become a challenge for the international as well as local students to do their internships in Australia (Victoria, Melbourne). So students have to move temporarily to the other countries for the internship programme. Not all students are fortunate to get changes to do their internship with renowned companies in Australia. Few international students preferred to return to their home countries and complete their internship with small companies which impact their employment carrier.

Companies also sponsors and grant to the universities for research and development projects and due to migration of the companies and industries the universities have funding difficulties to maintain the standard of research and development and to start new research and development projects with high budget.

External challenges:

Stiff competition by English and non-English speaking countries:

Australia's (Victoria, Melbourne) educational sector is just not facing challenges from internally also have been facing external challenges. "As many countries, including the UK and the USA, attempt to respond to their struggling education systems in the wake of economic downturns and a greater influx of students, a new emphasis has been placed on the importance of international education and studying abroad".  

"Education export giants the USA and the UK are becoming more aggressive and pro-active in their marketing". After economic downturn in 2008, there was funding cuts in most of countries educational sector and have a fear of more funding cuts in future. The universities approach to the markets where the economy is developing such as India, Middle East countries, Malaysia, Thailand, South Korea and China etc.

From these nations, most of the students migrate for the higher study so to keep these numbers of students in mind. The universities from UK and USA open satellite centers in these countries and it is win-win situation for both parties. The local students getting the same foreign degree in their own country and the fee and expenses is less. On other side Universities also making money as the operating cost is less and getting large number of students. Recently, Indian government approves the bill to the foreign educational institution to open their satellite campus in India.

Other English speaking countries are also focusing on educational industry and opening new market to attract the international students. "English speaking countries such as New Zealand and Canada, both of which have gained strong growth from their reasonably low basis".

Not only the English speaking countries is threat to Australian education sector "in fact that's not now the case. The competition includes non English speaking countries that have adapted English as the language of tuition in courses". The best example is Singapore where English is the official language and the language of tuition is in English. Government promotes education industry for export and emerging a strong competitor. It also restricts the migration of students to Australia, USA and UK.

Future challenges:

The Global Economic environment:

The future global financial crisis and the resulting economic slowdown will be a threat to continued growth of the Australian and international education industry across the world. The slowdown of the economy could affect the migration of international students because of difficult to afford the course fee and cost of living in Australia. It may also difficult to get educational loan from bank. It affects the availability of part-time work and demand of the employment opportunity in the market. The Government will cut the funding of the universities and the private companies will reduce the R&D grants. However, in this situation the personal investment will be an option for the universities which is only possible when significant number of enrollment of the international students take place in the Australian Universities (Victoria, Melbourne).

"United Nations Educational Scientific and Cultural Organization data indicates that, in the past 30 years, there has not been a single year of decline in the aggregate numbers of overseas students worldwide. This is despite a number of events that disturbed the world economy, such as the Black Monday stock market crash (1987), the Asian economic crisis (1998) and the 9/11 terror attacks (2001). Only the avian flu crisis in 1998 had slight - and brief - negative impact on international education growth rates".

Interstate competition:

"All Australian states and Territories now support an education export industry, with Victoria and New South Wales well ahead in attracting the majority of students". This is a big internal challenge for Victoria Government and their educational export sector that how to continue to keep the growth speed and maintain standard of the education. The Victorian Universities have to perform better than other Australian Universities to attract the Government and private funding as well as the international students. The Victoria government has a challenge that how to collaborate with inter-state universities to use their infrastructure while keeping themselves ahead of other states and promote their brand image. Victorian universities also have challenges to keep attracting the local students so that they will get more grants from the government.

Political conflict:

In Australia (Victoria, Melbourne) the majority of students are from China. Australian government doesn't want any political conflict in shake of their interest with China.USA and Australia showed their concern on China's Missile test and in the 'Race of Arms'. Australian Foreign Minister Alexander Downer said Australia did not want to see "some sort of spread, if you like, of an arms race into outer space". According to the Australian prime minister "Australia's relationship with the United States of America is our most important international partnership. We are allies, we are trading partners and we co-operate on the international challenges confronting all nations". Any future political conflict may a big setback for the educational export industry for Australia.

Global competition:

Established education destination USA and UK aggressively marketing to increase their market share as they lose after 9/11 attack. They are not just improving their infrastructure as well as strengthening their resources. So that they can provide the best facilities to the international students in their countries. Politically they also try to improve their relations with the countries from where the majorities of students come for higher study. Developed countries also extending their business to the developing countries to improve the economic status of the country.

UK and USA aggressively opening satellite centers to the developing countries such as China, Middle-East Countries, Thailand, and Malaysia and soon will be in India etc. The majority of students migrate for higher studies form these counties. Satellite centre can accommodate more local students and also overcome the challenges faced by the students migrate to overseas for study. Western educational giants also trying to open research centers in different countries with specialized group of industries such as specialized research centre of informational technology in Hyderabad, India. Canada and New Zealand also open a new destination as English speaking countries.

Non English speaking countries also a great threat to the Australia's educational industry such as China, Malaysia and Singapore taking major steps to improve their infrastructure and promote higher educational export.


Financial help to the international students (such as in USA and UK)

Improve ranking of the Universities (helpful for marketing)

Diversified range of education (from small courses to the specialization and finally research)

Improvement the infrastructure ( accommodation)

Employment of multinationals staff (In universities, public transport system and hospitals etc, which will help to handle multinational students)

Aggressive marketing (Promote Australia Brand)

Tie-up with other academic giants and allow to open satellite centre in Australia

Multilingual educational enrichment class (for weak in English students)

Attract private investors ( for investments to increase the infrastructure of the University, to improve the research facility and provide scholarship for students )

Educational seminar and prepare data base of students (sending e-news latter and update information)

Enhance student safety (social security)

Preparation of the community to accept the international student

Organizing international events, seminars and championship

Tie-up with multinational companies for R&D (biotechnology, IT, engineering, etc) and

Employment opportunity with the multinational companies