Australian Financial Review, 9 April 2017
By Tim Dodd
For Australia’s prestigious research universities, the Group of Eight (Go8), this week’s visit to India by Prime Minister Malcolm Turnbull and Education Minister Simon Birmingham is an opportunity to be seized.
It could help solve a major problem, which is that they are very reliant on China for their lucrative international student business, to a far greater degree than the university sector as a whole.
Chinese students are a goldmine for the Go8. Of the 113,000 Chinese students enrolled in Australian universities last year, 53 per cent were in the eight elite universities.
This is because Chinese students tend to be status conscious and flock to the most highly-ranked institutions, which in Australia means the universities of Sydney, Melbourne, Queensland, Adelaide and Western Australia, as well as Monash, UNSW and the Australian National University.
This is, on the face of it, a great thing for these research intensive universities because the stream of revenue from China helps pay for a volume and quality of research which government funding alone would never be enough to cover.
The downside is that the Go8 are now highly reliant on China and, if the Chinese economy dips, their research programs will be in deep trouble.
An obvious way to spread the risk would be to increase student numbers from India, the other rapidly developing country with a billion-plus population which is hungry for education.
But so far it’s proved hard for the Go8 to diversify. The eight elite universities had only 9 per cent of the 45,000 Indian students enrolled in Australian universities last year. Although India has a thriving middle-class who seek a prestigious overseas education for their children, this top level demographic is more fixated on universities in the US and Britain.
For Indians as a whole, studying in Australia is often seen as a pathway to immigration. This means they choose degrees at cheaper universities than the Go8.
But now things have changed. Donald Trump is US President. Britain has committed to its exit from the European Union, and tightened visa conditions for international students. In most of the Western world nativist movements are growing in influence and students from other cultures feel distinctly unwelcome.
It’s an opportunity Australia can use in a positive way, says Vicki Thomson, the Go8’s CEO. Now more top international students are likely to think seriously about coming to Australia’s prestige universities.
To help get the message out, five Go8 vice-chancellors have joined the 120-strong education delegation which has gone to India with Turnbull and Birmingham.
If the Go8 can enrol more Indians it will help solve another problem they have, which is that international students have a very high preference for business degrees. Sometimes 80-90 per cent of students in business courses can be Mandarin speaking.
If more Indian students enrol it will ease this problem because Indians are more diverse in their fields of study. Whereas 62 per cent of Chinese students in postgraduate courses in Go8 universities are doing business degrees, only 28 per cent of Indians are. Indians are also strongly represented in postgraduate engineering courses (22 per cent) and IT courses (21 per cent).
It is a similar picture for undergraduate degrees where 45 per cent of Chinese students are doing business degrees, but only 27 per cent of Indians.
The Indian student market has always been volatile. It collapsed in 2010 after scandals in private vocational colleges and a series of attacks on Indian students. Jonathan Chew, from the consulting firm Nous Group, points out that while the number of Indian students today has recovered to the level before the slump, the composition has changed.
India is now a mainly higher education, not a vocational education, market for Australia. But the Go8 universities need to get a larger share of Indian students to mitigate their China risk.