Research on the Australian Education Export Industry Essay

Executive SummaryThe following penning provides a detailed compend of the four sectors in the education industry in Australia, which are higher(prenominal) Education, VocationalEducation and Training ( old stager), position lecture Intensive Courses for Overseas Students (ELICOS) and the schools.The report starts interpreting trends from the industry in Australia, analyzing tots of enrollments and commencements of savants in each sector, as well as their issueities. With these numbers we take for an oerall idea of the scenario, which shows that spunkyer Education is the Over Performing sector, followed by ELICOS, VET and schools. A second phase angle of the inquiry is the PESTEL analyze, which observes the Political, Economical, Social, Technological and Legal conditions of Australia, with the conclusion that Australia has a static government, strong economy and high currency, great woodland of life sentence, garbs all-inclusively in technology and gives incentive s to multinational students to come to Australia. The selective information provided by PESTEL helped with the SWOT analyzes of the industry and sectors in Australia.The findings shows opportunities manly in students that elevate in more than whiz course in Australia, which already lead us to consider ELICOS as a good sector to invest. After the secondary information ga in that respectd, a qualitative research was created and is here presented covering that all the interviewed international students are having a substantiative experience in Australia and more than half would enroll in a various course later on finishing the current one. As a result of the findings, ELICOS course was pointed as a better option of investment since higher education has risks of high be and perceived fictional character.Private institutions galloping ELICOS and VET come up as an however better choice, since almost one quarter of international students progress from ELICOS to VET. reinvigor ated South Wales is recognized as a better location for investment, since the majority of students choose that state as a destination. A few schools offering ELICOS and VET were identified as an option for investment, however a more detailed analyses of their internal data would be necessary to point out with certainty which one would be the best option.1. Introduction1.1 BackgroundStudents from all around the world choose Australia as a register destination, wishing to gain a best education. Each year, Australia becomes evenmore popular, with many new international students enrolling in courses around the country. In 2013, 526,9321 international students enrolled in education programs in Australia, representing a 2.6% subjoin over 2012. Most of the international students in the country are perusing in the high Education sector, followed by the Vocational Education and Training (VET) sector, the English Language Intensive Courses for Overseas Students (ELICOS) sector and the sc hools sector.1.2 Purpose of ReportThe aim of this report is to research just about the education export industry in Australia. The report was commissioned by the Group April with the aim to analyze the trends in the following education sectors VET, ELICOS, Higher Education and Secondary School courses. The Market Trends will be interpreted in order to identify their impact on the education sector, as well as potential opportunities and threats to the industry.2. Interpreting Market TrendsFor the purpose of this research we will analyze the number of international students commencements (number of students starting a new course) and enrollments (enrolling in a course) in the country. According to Australian Education International, the total pass judgment of commencements and enrolments students has been growing steadily in the last ten geezerhood. We will analyze the data the number of international students from all sectors from 2010 to 2013. The following chart shows the summar y of commencements from 2010-2013.graph 01 International Students Commencements from 2012 to 2013Source http//www.austrade.gov.au/Education/Student-Data/2013/In addition to that data, we overly keep up the table below, comparing the number of commencements and enrolments per year and course Table 01 Enrolments and Commencements from 2012 to 2013With the data provided, we squeeze out see that in 2013 Higher Education Sector ranked first by volume of commencements and enrolments. VET had the secondlargest volume of enrolments but third in commencements. ELICOS ranked second in volume of commencements, but third in enrolments. From 2012 to 2013, the number of commencements in Higher Education increased by 8.1%. The ELICOS commencements also registered 21% growth in the same period. The VET sector commencements have been declining in the last 4 years, but had completely a minor decrease from 2012 to 2013 (0.1%). Schools accounted for only 2.9% of commencements, declining steadily in the past years.It is possible to notice that even though Higher Education is the over acting sector, ELICOS is also gaining more relevance over the past years. The graph 01 shows that VET sector has been declining over the years. When considering number of enrolments for each sector, the top nationalities differ between the categories. The Australian authorities also provides the following data Higher Education enrolments China (39.9%) and India (7.2%) VET India (21.5%), China (10.5%), Republic of Korea (7.3%) and Thailand (6.6%) ELICOS China (25%), Brazil (8.7%) and Thailand (7.9%)Schools China (46%) and Vietnam (10%)The top five nationalities present in number of enrolments in 2013 contributed to 52.1% of the total, which were China (28.5%), India (9.3%), Republic of Korea (5.2%), Vietnam (4.9%) and Thailand (4.1%). When find outing directly at students visa granted, the last five years have also showed a majority of Chinese, Indians and Koreans students, differing only in the last two countries. The chart below shows the student visa applications granted by the top five countries of origin Chart 02 STUDENT VISA APPLICATIONS minded(p) BY TOP FIVE COUNTRIES OF ORIGINSource http//www.abs.gov.au/AUSSTATS/abs.nsf/Lookup/4102.0Main+Features20Dec+2011 Accessed on 29/10/2014As per the chart above, China represents the majority of international students, with roughly 50 thousands student visa granted in 2011. China also delineated in 2013 the majority numbers for all education sectors. Also, over 90% of Chinese ELICOS students went on to do get along field of operations in Australia in 2012.2 The Australian Financial Review points out thatthe most likely reasons why Australia became a destination for so many Chinese students can be due to the increase of the middle class of the country and the geographical proximity to Australia.3 India unchanging represents the second largest group of international students, even after drastically dropping from 2009 and o n. The plunge on numbers came specifically after a series of attacks on Indian students in 2009.4 South Korea comes in third in the represented numbers of granted visa, followed by Malaysia and Brazil. There is also a strong affinity between the Australian Dollar rates with the number of students commencements per year. The table below shows the number of students commencements versus the average rate for AUD/USD Dollars. YearIt becomes even more noticeable when represented in a chart how one factor is influencing the early(a). The lowest the Australian dollar rate is, the higher the number of commencements becomes. On the other hand, as the Australian dollar rate increases the commencements decreases proportionally. The following data can be seen in the next chartChart 1.1. Students Commencements vs Australian Dollar Rates2.1Over Performing and infra Performing SectorsAnalyzing the numbers of commencements of each area in the last 4 years, it is possible to say that the common chord Over Performing sectors would be Higher Education, ELICOS and VET. The three Underperforming sectors are schools, VET and ELICOS. Compared to the three other sectors, the Schools sector is small and has been declining over the past years. To proceed with the study of which sector would be more participationing to invest on, a PESTEL (Political, Economical, Social, Technological, Environmental and Legal) and SWOT (Strengths, Weakness, Opportunities and Threats) analysis will be made.2.2 PESTEL AnalysisThe following analysis intend to identify the Political, Economical, Social, Technological, Environmental and Legal Australian conditions, in order to provide enough data to clearly present its Strengths, Weaknesses, Opportunities and Threats afterwards. PoliticalThe Australian Government is a constitutional monarchy, being under a federal system. For that reason, Australia can be considered a stable country. The Government also has innumerous initiatives regarding internationa l students, such as the International Students Strategy of Australia. With those initiatives, Australias Government acknowledges the splendor of international students for the country and seeks to protect the countrys reputation for high-quality education and for being a safe, welcoming and culturally diverse place to live.7EconomicalThe Australian economy has experienced continuous growth and also features contained inflation. It is one of the largest capitalist economies in the world with a Gross Domestic Product (GDP) of US$998.3 trillion (2013 est). The service sector dominates the economy, accounting for about 70% of GDP and 75% of jobs. 8The un purpose rates are considered low (6.1% in September of 2014), however the part- clock employment has decreased recently.Those numbers may affect international students, since they can only work on part-time contracts. The Australian Dollar Currency has been maintained stable over the past few years, valuing 0.88 US dollars in October 2 014. A strong currency is a factor of great impact on international students, since the shift rates may affect their decision. 9SocialAustralia population is composed by a majority of white people (92%), followed by Asians (7%) and aboriginal and other (1%). The official language is English, which is one the main reasons for international students to choose it as a destination. Its considered a welcoming country for people from overseas. Australia is also know per its high quality of life, safeness and great education institutions.EnvironmentalThe weather conditions and the natural landscape in Australia are positive aspects of the country when seen by students. Travelling interest has a major impact on students decision.TechnologicalAustralia is a modern country that invests in constant evolution of its Technology. The Government invests heavily in national science agencies, as well as providing about AU$2.5 billion to Universities10 to support research and research training activ ities, and this is complemented by research funding from the hole-and-corner(a) sector, non-profit organizations and state governments. That factor might influences in the Higher Education numbers for international students. Analyzing the worldwide situation, we can also point out that the technological changes have been providing advances in several sectors, as well as education. With the improvement in technological resources and Internet speed, a wide variety of courses online are being offered even by top quality know universities. That factor might also have great influence in students decision.LegalThere are many requirements for applying to a student VISA in Australia,which had also been in constant change throughout the last few years. Most of the Government reforms were introduced in receipt to the Knight Review (2011) of Australias student visa system, such as the streamlined visa processing and new arrangements for post-study work visas. At the same time that changes c ame to facilitate the students application, it can give a negative image to international students, since theres always a risk of changes in the law if theres an interest to renew their VISA.2.3 SWOTThe following SWOT analyses will provide data about the education industry as well as the sectors in Australia, pointing out its Strengths, Weaknesses, Opportunities and Threats.StrengthsHigh-quality education Australia is a worldwide destination to many students by its top quality of education. Australias English language teaching is in general highly regarded worldwide. Permission to work and study The student visa permission to work up to 40 hours fortnightly is a decision factor by many students that have to work while studying. Proximity to Asian countries Considering that many Asian countries look for English speaking countries to study, Australia stands out for its proximity to the continent.Highest quality of life Australian has the highest quality of life in the world, accordin g to the OECD Better Life Index organization, analyzing the categories income, housing, jobs, community, education, environment, civic engagement, health, life satisfaction, safety, and work-life balance. Tourist VISA and working Holiday students many international students come to Australia through tourist visas or working holyday visas, being allowed to study ELICOS to up to 14 weeks in the first case and 4 months in the second one. That gives an extra advantage for this sector, since they are easier to apply to.WeaknessVISA requirements Australian VISA requirements changed recently in 2012, accepting the recommendations of Knight11. Event though it brought positive changes to facilitate the VISA process, the constant changes in VISA requirements might make long term students consider if any changes will still come up. High price and competitors countries quality Australia waspointed by a HSBC report as the most expensive destination for higher education for international students . Besides that, when it comes to perceived quality of higher education, it was ranked in 5th by Chinese parents (staying behind the States, UK, Germany and Hong Kong). 12OpportunitiesGrowth in numbers of higher education international students a new British Council report has predicted that the number of international students of higher education will reach 3.8 million by 2014.13 Strengthening of the student VISA from Canada and USA With modifications in student VISA requirements of competitors countries, Australia comes up as an option for new students. Major events in the country Major events are frequently being held by Australia, calling international attention and being an extra reason for students to choose the country as a destination. The Commonwealth games, which will be held in 2018 in the Gold Coast, might have a big influence in student numbers, especially for short-term courses (such as ELICOS). Students progression from different sectors Many students progress from ELI COS to higher education or VET, most likely had been on a package arrangement where the ELICOS study was a precondition for undertaking the next course. 14ThreatsChanges in New Zealand student visa The recent changes in New Zealand student visa now allows more English language students to work part-time, go a even bigger competitor to Australia as an destination.15 Crimes against international students Any crimes and racist acts against international students have an impact in international students numbers. With the murder of four international students in Brisbane since November of 201316, the exposure by national and international media can damage the safeness image of the country.3.0 Approach for researchAfter our secondary research about the education market in Australia, a qualitative study was made with international students in order to find out the reasons and influences that made them choose to study in the country. Anonline questionnaire was made and answered by 18 stude nts.3.1 Qualitative AnalysisThe nationalities interviewed were Brazil, USA, Chile, Spain, Italy, Czech Republic and France, from which 61% were Brazilians, 11% Italians and 28% of each other nationality. Chart 03 Nationalities half of the students are enrolled on ELICOS courses, one third on VET and 17% on Higher Education. None of the interviewed is studying on secondary school. The schools of study turn between the following ILSC Brisbane, Shafston, Queensford, ALS, Queensland Academy of Technology, TAFE, Bond University, University of Western Australia, Australian College Sports andFitness, Hetc Harvest, VIVA College and Melbourne University.All the interviewed students declared that their experience in Australia has been positive so far and 67% would enroll for another course in the country and consider living in Australia permanently (from which 22% are current ELICOS students). More than half of the students (56%) considered studying in a different country before choosing Au stralia, being mentioned the following New Zealand, Canada, USA, Ireland, South Africa, UK and Germany. An open question also asked the students to describe briefly why their experience in Australia has been positive or negative, and it was mentioned the different cultures/nationalities present in the country, fortune to meet new people, personal and professional growing, independence, improvement of English, great quality of life, good weather, new challenges and travelling (Refer to appendix 1 for further details).4.0 Recommended SectorThe following section will explain which sector have been identified as the best business opportunity, based on the interpretations of marketing trends and qualitative analysis sections of this project.Based on the report findings, we can see that two sector are in great advantage Higher Education and ELICOS. While Higher Education has been the sector over performing in the last years, the forecast for that sector maynot be favorable especially du e to the competition of different countries that offer lower costs of studying and are increasing high-quality study reputation. To open a new University or other Higher Education school would be a great risk for investors, considering that it would take time to image their brand awareness and reputation. More than that, the costs for buying an existing private institution would be much greater in that sector.The second over performing sector was considered ELICOS, since the numbers of commencements and enrolments have been increasing constantly. When it comes to ELICOS, it is also an entry door to other courses in Australia as many students that proceed from ELICOS to VET or Higher Education. ELICOS students may also be on student visas (currently around 60%) or visitor, working holiday or other VISAS (around 40%).17 ELICOS sector is also divided in a wide range of courses, where as the main courses offered in Australia are General English, English for Academic Purposes, Exam Pre paration Course, English for Special Purposes, English for Teaching and Study Tour. These options are closely aligned to the need of the students, attracting all sorts of international students. 4.1Competitor AnalysisELICOS courses are provided in a wide range of institutions and sectors. According to the Knights review (2011), the ELICOS activities occur in almost all parts of the international education sector Unpublished National English Language Training (ELT) Accreditation Scheme (NEAS) research shows that of the 269 active providers in 2010, 100 were standalone ELICOS providers, 99 were private VET providers and another 18 were publicly possess VET providers, 32 were universities and the prevailing 20 were schools. The numbers of ELICOS students in the different providers also varied significantly. 24 providers had a capacity for 50 or little students. 81 providers had a capacity for between 51 and 150 students. But more than half of all registered providers, 164, had a cap acity for more than 150 students at a time. (KNIGHT, 2011, p. 64)18Considering that data, it is a better investment to buy an existing institution than opening a new one, since there are a wide number of competitors already. Since the majority of students choose to study in NewSouth Wales, as we can see per the chart below, the best investment would be in NSW state. Chart 07 International Student Enrolments & Commencements by State and Territory (2010)Source http//www.abs.gov.au/ausstats/abs.nsf/Lookup/4102.0Main+Features20Dec+2011 accessed on 30/10/14 The private VET providers that also offer ELICOS as an option can be considered a good investment option, since AEI researches show that 23% of ELICOS students in Australia eventually progressed to VET. 19 New South Wales Government also tells that Private VET colleges and institutions are very popular with international students, with the majority of international students in NSW studying at a private college.20 That data confirms that a private ELICOS institution that also offers VET will be a good choice. The following private schools in Sydney stand out as options that provide ELICOS and VET courses ILSC Education Group ELICOS and VET providerSince the number of students and financial reports of each institution are not publicly available, there isnt enough data to point with certainty which school would be a better option for investment. However, a more detailed analysis can be made as a secondary step of this report.5.0 ConclusionThis report objective has been centred on identifying the over performingsectors on the industry of education, which we believe have been successfully reached. The data provided will give be used by the Group April to decide which sector is the most promisor. We would recommend Group April to closely look at potential schools with extensive knowledge and good reputation, besides being costly competitive and well located. Finally, throughout the whole project, attention was maint ained to remain realistic based on the investor budget and interest in industry.The findings of the interpreting trends section as a whole were summarized in a SWOT analysis table to facilitate its understanding. Considering the overview of the over performing sectors the best choice considered for investment was the ELICOS sector, since is growing at a very good pace. SLIC will remained opened for further discussion of the content of this report, as well as for conducting a second phase of research.Question Describe briefly why did you found your experience in Australia positiveStudent 1. I had a substantial improvement in my English level at the same time I could know different cultures (not just Australian) and met many interesting people. Brazil, Male, 21-25 years old, ELICOS StudentStudent 2. Because there are many differences between Brazil and Australia. Most of the social problems that we have in Brazil are almost nonexistent here. The quality of life is extraordinary. Brazi l, Male, 26-30 years old, ELICOS studentStudent 3 Positive Friendly citizens, Weather, Good opportunities of work Brazil, Male, 26-30 years old, ELICOS studentStudent 4 To be completely independent, Know about new cultures Learn new languages Chile, Male, 26-30 years old, ELICOS studentStudent 5 collect to the people I metSpain, Male, 26-30 years old, ELICOS studentStudent 6 Because Australia still giving me a lot of opportunities to grow personal and professional. Brazil, Male, 26-30 years old, VET studentStudent 7 New experience and challenges, meeting new people, improving my English, travelling Czech republic, Female, 31-40 years old, ELICOS studentStudent 8 Good people, opportunity to work, grow up by myself. Brazil, Female, 26-30 years old, VET student