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Clouds on the horizon: the perfect storm thesis


Melanie Butler asks Ben Waxman and Samuel Vetrak how political changes in the UK might affect the ELT and higher education sectors.

What happens to a country’s international education market when harsher immigration policies are introduced, its currency gets stronger and at the same time economic crises batter its source markets? The answer is that international student enrolments go down.

This happened in the US after 9/11. After the economic crisis that followed and the introduction of Sevis, a system that allowed the tracking of Muslim students, numbers plummeted in 2002 and didn’t pick up until 2005.

It was almost a ‘perfect storm’ of factors that ‘compounded each other’, as defined by a theory proposed in a 2007 study, Foreign students coming to the US: the impact of policy, procedures and economic competition by Susan F. Martin, B. Lindsay Lowell and Micah Bump of Georgetown University.

Their research found that visa restrictions alone were not enough to explain the fall in student numbers, and that perceptions were just as strong – when a strict immigration policy is introduced, the negative effect is felt also in markets that are not directly affected by it but still perceive the host country as ‘unwelcoming’. In the case of Sevis, the most affected source countries were Brazil, China, Switzerland and Saudi Arabia.

People say the UK is experiencing a perfect storm. We asked two experts, Ben Waxman from Intead and Samuel Vetrak from Student Marketing. Their responses give an insight into what is happening in the ELT and higher education sectors and offer advice for braving the storm.

Is there such a thing as a perfect storm?

SV: Many factors contribute to a difficult situation – a combination of regulations, price and economic circumstances. What is happening in ELT could potentially be called a perfect storm, but I wouldn’t compare it to the situation in 2001. We need to consider the stage of the industry, a mature stage, which brings challenges that contribute to the storm.

BW: As for ELT, in higher education there is a more mature industry at this point compared to 2005 – a far larger population of institutions in the market place struggling and competing to recruit students. Awareness has grown and the economic situation has improved, so travelling has increased. The challenges, political and economic, are very significant. For example, as oil prices have dropped, enrolments from countries like Nigeria and Venezuela have dropped. However, economic factors are more isolated to specific countries that are being hit hard than a global phenomenon.

Which factors have an effect on students’ decisions?

SV: There are factors that influence student mobility in the long term, such as exchanges during high school and higher education, and factors that influence mobility in the short term, most notably the exchange rate, which is the most significant and immediate. More in ELT than higher education, exchange rates direct students to certain destinations. In ELT this year there was a massive increase in bookings towards Canada instead of the US, and last year it was Ireland and Malta at the expense of the UK.

In higher education quality is more important than price, so academic programmes are more resistant to these changes – but we still see a strong correlation.

In 2010 Australia experienced its own perfect storm. There was an increase in racist attacks, a crackdown on dubious further education colleges and an increase in visa restrictions – and the Australian dollar was particularly strong. The market collapsed. ELT fell by 37 per cent, even though it hadn’t been directly attacked as the more restrictive regulations affected further education. Universities were hit a little further down the line. Do you think the Australia example is typical? Could something similar happen with Brexit?

BW: Yes, it is typical and not uniquely Australian. A recent Icef Monitor article reported that Germany’s student enrolment is increasing from China and India at the expense of the UK, which is losing out due to the cost of education and now also due to its foreign policy – this issue is coming forward also in the US. We conducted a survey with FPPEDUMEDIA in March in which we asked students whether they were more or less likely to study in the US depending on the result of the elections. Some of us thought international students wouldn’t spend too much time following the election campaign, but we were in for a surprise: 60 per cent of students around the world said that they would be far less inclined to study in the US should Donald Trump be elected president, and this figure rose to 80 per cent for Mexican students. I guess there is a similar effect with Brexit.

SV: There is no consistent research on the effects of Brexit on ELT student enrolment yet, just anecdotal evidence. There must be more time to measure it, and summer is not the best time to do so as the target group is not available. In general, the reaction of the industry seems to be moderate, not panicky or emotional, which is very important. Time can actually play for the UK as a positive element as it gives politicians the time to see potential damage.

Both schools and agents report confident statements – with western Europe more confident than eastern Europe and Asia – and this is good news for the ELT industry in the UK.

It’s a different story for the UK as a higher education destination. I would be more concerned for this sector as one of the most important factors for higher education mobility is employability, which is more and more restricted in the UK. So, Brexit and restricted employability would favour Canada, Germany, US and Australia at the expense of the UK.

What is the biggest challenge for the higher education sector?

BW: There is more competition and more variety of programmes and products. Cheap and poorly delivered services are going to falter – especially now with social media, which is very quick to kill you if you are not doing well. Quality will always keep you strong, even in the storm. A quality offer and right promotion will always sell well.

On the other hand, there is a new wave of anti-immigrant sentiment from the US and the UK, and it is hard to predict where this is going. Will this pass? Maybe it’s not going to have a huge impact on the market, but it shows a lack of perspective and understanding on what collaboration does to the world – especially for academia.

And for ELT?

SV: The market needs to develop a better supply. They should invest in quality and aim at a more diverse distribution – currently 78 per cent of students in the UK come from Europe, and this makes the market vulnerable. With this healthy reaction, the industry can succeed.

What advice would you give to British universities to protect themselves from problems looming in the future?

BW: Our research saw that a primary motivator for international students is employability. Employment opportunity policies are essential, so the industry must find a way to lobby and improve this. Short of that, it is important for institutions to market themselves with an eye to the outcome: how are graduates doing, are they finding jobs, who is hiring them and where, etc.

If an institution can promote itself with facts and figures to back it up, then it is going to draw the attention of international students. Those who are doing a poor job, with poor visibility and no streamlined process, are going to be hit very hard. So I guess my advice is, get your act together and stay focused!

And for the ELT industry?

SV: It seems to me that the market is mature, but supply is at times not up to speed. First of all, don’t lose track of the market trends in order to adapt supply to demand quickly and efficiently. Second, invest in technology. Tools like automated booking systems could save money and time. Third – data, data, data. The industry is under-documented. More data needs to be available so schools can be more empowered, for example, to follow market trends or to go to banks and investors and prove their value.

When it comes to Brexit, I am not sure there is anything that could help. Much more important than Brexit is the argument around net migration, both for international students and high-skilled mobility. The argument needs to be supported by numbers, facts and data, not by emotional appeals.

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