20 September 2017 Register to receive our free newsletter by email each week
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Education as an export is worth billions

Providing education to students from more than 100 nations around the world is Australia’s fourth largest export, behind iron, coal and gold but ahead of tourism, natural gas and crude oil, according to a new report.

The report says education as an export has played a key role in Australia’s economic prosperity, doubling in value every five years from 1990-2010. The sector overtook tourism as the top service export in 2007-08 and edged out gold, briefly, in 2009-10.

But the report notes that 2009 was the peak and that, since then, the income generated from the declining number of foreign fee-paying students – notably from India – fell from A$17.3 billion (US$18 billion) in 2009 to A$15.5 billion in 2010, and down to almost A$14.8 billion over the past year.

Prepared for the main higher education lobby group Universities Australia, the report was written by Alan Olsen, an international education consultant and director of the Sydney-based company Strategy Policy and Research in Education.

Olsen used figures provided by the Australian Bureau of Statistics (ABS), which are based on spending on fees and goods and services by students onshore in Australia.

In a research snapshot compiled by Australian Education International this month, the figure for education export earnings was slightly higher at A$15.3 billion compared with the A$14.8 billion supplied by ABS.

The difference of A$538 million, Olsen says, was income earned through offshore and other education services, including education consultancy, correspondence courses, services through education institutions, and royalties. Income generated by the operations of offshore campuses is excluded.

The report provides charts showing export league tables for each of the eight states and territories and these highlight the extent to which some state revenues have become heavily dependent on the fees and living expenses outlaid by foreign students. The greater portion of the income the students generate for the states and territories is derived from studying at universities.

Education was the largest export for Victoria – “by the length of the straight”, says Olsen – which peaked at A$5.5 billion in 2009 but then dropped by A$1 billion over the past year. It was also the second largest export sector for New South Wales, behind coal, and generated A$6.4 billion in 2009 and then fell to A$5.5 billion.

But in the resource-rich states of Queensland, South Australia and Western Australia, education fell back to fourth, sixth and eighth place respectively behind coal, crude oil, natural gas, minerals and tourism.

Universities Australia Chief Executive Belinda Robinson said the report highlighted the contribution of international education to Australia’s economic prosperity. She said international education was of critical importance to the economy, particularly in Victoria and New South Wales.

“It also has enormous potential to underwrite future prosperity and cultural diversity here as well as deepening Australia’s engagement and influence around the world, particularly in the Asian region,” Robinson said.

“Education globally is a high growth industry: by 2030, the number of higher education students enrolled around the world is expected to reach an astonishing 414.2 million, up from 99.4 million in 2000. Of these students, 10.5 million are expected to be in the market for international education.”

She said the value of education exports and the potential for further increases was critical for diversifying the Australian economy from an over-reliance on the resources boom, particularly now that commodity prices appeared to have peaked.

“As Australia builds the knowledge-based industries of the future it will rely ever more strongly not only on its domestic students but international students to fill skills shortages, collaborate on research and forge high level people-to-people networks in business, diplomacy and cultural spheres,” Robinson said.
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