KEY POINTS:
With all the talk about global economic problems, it's only natural New Zealand's export industries come under the spotlight. Tourism is already experiencing a downturn, and the outlook for land-based export industries is mixed.
International education, by contrast, has been growing steadily for the past couple of years, and when analysed demonstrates some key characteristics that may make this quiet achiever even more important to New Zealand in the years ahead.
The international education industry in New Zealand looks towards next year with cautious optimism after a roller-coaster decade of tremendous growth, single-market dominance, retrenchment and a return to significant growth from new markets.
Ordinarily, the low dollar would be an excellent stimulus for international students. Offsetting this is the lack of economic confidence and falling domestic GDP that much of the world faces.
But for most international students, education is not a short-term consumption. It is a long-term investment decision they and/or their parents have planned and saved for.
In contemplating the future, it is useful to look at the industry's recent history. New Zealand's international education industry had reached a peak in 2004 with respect to student volume and financial returns. This peak was almost entirely related to: a) The vast influx of Chinese students in all sectors from 1997-2003; and b) The marketing and recruitment in some other markets undertaken by both existing and new market entrants off the back of financial
inflows relating to Chinese students.
Yet the Chinese experience was by no means all negative. The industry has learned much over the past few years about global market dynamics.
It was a sharp lesson in risk management. And it created an impetus for growth and investment that continues to benefit those who understood that market cycles are an inevitable part of the export landscape.
Since 2006-07 considerable efforts in generic and institutional promotion and new market development have seen a return to growth across many existing and new markets. Key markets have changed and a range of competitive influences, internal and external, have affected NZ's industry.
These include increased competition globally, the effect of the exchange rate, student requirements and the development of more relevant services and courses.
In spite of the woes of the past few years, the international education industry is more than 400 per cent larger than it was a decade ago - a growth record that is unparalleled by any other major export earner.
This is not a sunset industry - it is one that continues to offer scope for New Zealand. In fact, the foreign exchange earnings from international education are currently calculated at $2.3 billion.
That's higher than it has ever been, and about a quarter of tourism's forex earnings.
So how has this recovery come about?
Global demographics, student aspiration and economic growth in many countries have continued to create a growing demand for international education. New Zealand has seen major growth from markets such as India, the Middle East and South America.
But it's not only new markets that have "stepped up". One of the biggest success stories has been the recovery of the Chinese market, which saw more than 4000 new starts.
On the rate of enrolment for the first four months of the current reporting year, this number will grow again.
Other mature markets such as Korea, Thailand and Germany have also shown increases year on year. Institutions are becoming more focused on their particular advantages, and in ensuring that international education is a complementary adjunct to their domestic activity.
This focus results in a more stratified and diverse marketing approach, as institutions position themselves to target audiences.
The good thing is that all education sectors have shared in the growth. Schools in particular have shown good growth in student numbers, whilst long-term tertiary numbers look set to swing up again.
The English language schools have also benefited from modest growth, with many students requiring language tuition before entering tertiary study.
We have come a long way and learned many lessons over the past decade. Robust protections are already in place and they work. And many more challenges are ahead. Competitors abound, and many countries have huge and well funded marketing, promotion and development programmes.
In spite of this, New Zealand has been, is and will continue to be an excellent choice for students who want the quality of study and lifestyle our institutions offer.
International education continues to deliver substantial benefits to New Zealand.
