Overseas student numbers to soar

October 31, 2003

A fourfold jump in the number of students seeking access to higher education in other countries by 2025 is predicted by researchers from IDP Education Australia - from 2 million this year to 7.6 million.

IDP says that within 22 years, 3.4 million foreign students will be studying in one or other of the five major English-speaking destination countries: Britain, America, Australia, Canada and New Zealand. More than 90 per cent of the demand will come from Asia.

IDP senior researcher Anthony Bohm told an international education conference in Melbourne last week that British universities were already facing stiffer competition from US higher education institutions.

"But the UK will experience that increased competition much more quickly than Australia because it has a far more viable domestic market," Mr Bohm said. "Foreign universities can set up their operations there and meet both the domestic and international demand."

He said IDP was collaborating with the British Council in developing forecasts of international education demand for British universities.

Details will be released in January.

IDP also developed, in conjunction with the Centre for International Economics, what Mr Bohm described as the world's first "discrete-choice model" for international education, which provided insights into the factors influencing global competition.

The model shows that students wishing to study overseas are influenced by six factors: the quality of education, employment prospects after graduation, affordability, education accessibility, lifestyle and personal security.

"The market, however, is very price inelastic; changes in perceptions of affordability, for instance, have little influence on a country's market share so fees can rise but this does not appear to affect student attitudes," Mr Bohm said.

He said that if British and US universities increased fees, this would actually increase demand. The higher the price, the more highly students perceived the quality of education.

"Students can't make an informed choice about the exact quality of comparable products so they use price as a proxy for understanding the value they'll get out of an international programme. Over time, however, the market will become more elastic," Mr Bohm said.

Despite media emphasis on global security issues, personal security was considered an important driver only in the Oceania region. In Europe and Central America, lifestyle was considered important by overseas students.

The IDP model suggests that if there was a 1 percentage-point change in student perception of the quality of education offered by British universities, this would have a large impact on Australia's market share.

"The message for Australia is that we have to do everything we can to protect the quality of our education," Mr Bohm said.

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