The American Threat in the Asian Century
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- Barnaby Lynch
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1 The American Threat in the Asian Century Sean Gallagher & Geoffrey Garrett October 2012 The R/evolution of international higher ed - three distinct business models Figure 1. The evolution of international higher education internationalization MNU Export Branch campus National Study abroad 1900s 1990s 2020s 1
2 The traditional national model Humboldt model linking research and teaching via disciplines Students drawn from local area or region Internationalization via PhDs & academics Study abroad Overseas experiences for national students The export model Export degrees to foreign students Revenue generation Australia world leader 20% of all students Major demand in Asia, led by China Branch Campuses Institutions moving across borders Financial motivation Australia has largest IBCs 2
3 Australian Undergraduate Exports, International Student Enrolments % total enrolments Australian Postgraduate Exports, International Enrolments % total enrolments
4 Australian export model Disrupted the previous domestic-student business model Export model is now the dominant business model at Aust unis 19 unis in ARWU 500 Subsidising domestic students Classic S-curve of lifecycle of business model innovations almost complete Australia s perfect storm challenge Australian factors High AUD, student safety, visa restrictions Australian campuses at capacity External factors Lower USD vs RMB More western competition post GFC high quality Asian unis Brand conscious Asian consumers 4
5 University of California foreign UG % total enrolments Berkeley UCLA University of California University of Washington foreign UG enrolments New Freshmen New Sophomores New Juniors 5
6 Chinese Undergraduate Student Enrolments Australia vs US with 2012 projection* 90,000 80,000 70,000 60,000 50,000 United States HE Australia HE Australia Univ 40,000 30,000 20,000 10, Towards 2020 UNESCO predicts trebling to 7m international students Australian campuses are already full at 25% int l students US campuses have <5% US HE is 15x size of Australian HE 6
7 International students as a percentage of total Higher Education enrolments 2009 International students per capita population
8 Regaining Competitive Advantage - To maintain revenue levels - Compete on quality, not on price - Knight Review is only the beginning - Improve on-campus, in-class experience - Better residential options - More experiential learning - Use MOOCs to improve face-to-face learning Asian Century More jobs in Asia less effective residency policies - Ever increasing quality Asian universities - Chinese export model 500,000 int l students by Fundamental problem with the higher education as export model as global supply increases, prices will go down 8
9 Multinational University - could Australia be left behind? Figure 1. The evolution of international higher education internationalization MNU Export Branch campus National Study abroad 1900s 1990s 2020s Multinational University MNU Major US universities with JVs in developing countries Yale, Duke, MIT, NYU Issue degrees with JV partners, access to US home campus Start up costs borne by JV partner New research infrastructure New student market and new academic talent global brand projection, value creation 9
10 Multinational University MNU Educate quality students in the markets that are important to Australia Experiment with new models of research and education in a developing country Not franchise education Distribute research activity based on comparative advantage across the MNU slice up the global value chain MNU Yale-NUS Liberal Arts College 21 st century Liberal Arts Singapore University of Technology & Design How MIT would be designed if built today Duke Kunshan University Leading American university JV in China NYU Shanghai - Portal Campus in Global network university Monash Bombay/Suzhou 10
11 3 Threats to Australian export model Lateral US, Canada, UK taking export market share, at high quality Above MNUs may push exporters down market Below MOOCs may commoditize basic higher education How to Compete: Our turn follow the US On quality In Asia OR Move downmarket and compete on price 11
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