Impact of Globalisation and Tertiary Education VISTA by alicejenny

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									Emerging issues in Vocational Education
             and Training:
 Impact of Globalisation on Tertiary
             Education

        Presentation to VISTA forum

                Angel Calderon
          Angel.Calderon@rmit.edu.au

        Melbourne, November 2008
                   About this presentation
• Context of globalisation -> Phases
• Trade liberalisation
                  • Challenges
                  • Trends
         – Australia’s relative standing
                  • Economic / social challenges
                  • Education
• Global and domestic educational
  challenges and emerging issues
RMIT University                       Slide 2
                        Globalisation in context
       Global trade flows                           Global mobility of people


     Sustainability *         Internationalisation of
                              market for goods,
                              production and
                              services                     Global mobility of
 Global diffusion of                                       capital
 knowledge ^                  Education is a service
                              industry, open to
                              competition in
                              Australia



                            Borderless production chains ^        * Not covered
                                                                  ^ partially covered in
                                                                  this presentation

RMIT University                        Slide 3
                                  Globalisation
• The term globalisation is generally used to
  describe an increasing internationalisation of
  markets for goods and services, the means of
  production, financial systems, competition,
  corporations, technology and industries.
• In turn, this gives rise to increased mobility of
  capital, faster propagation of technological
  innovations and an increasing interdependency
  and uniformity of national markets.
         Source: OECD – dictionary of terms.



RMIT University                            Slide 4
                  Phases of globalisation
• Increase in trade flows (mobility of goods and
  services)

• Mobility of capital

• Mobility of people and skills

• Borderless diffusion of knowledge

• Borderless production chains.
RMIT University            Slide 5
                       Globalisation and Education

• Inclusion of trade in educational services in the
  General Agreement on Trade in Services
  (GATS) in 2000 generated an impetus for
  internationalising education on a new un-
  chartered path:
         – Provide market access.
         – Non-discrimination once a provider is in the market
           (National treatment principle).
         – No discrimination between the treatment of member
           countries.

                  • Source: Calderon and Tangas, OECD, 2006.
RMIT University                           Slide 6
                             Trade flows - regional trade agreements
     Abbreviatio
          n           Name                           Countries
     AFTA             ASEAN Free Trade Area          Brunei Darussalam Cambodia Indonesia Laos Malaysia Myanmar Philippines
                                                          Singapore Thailand Vietnam

     ASEAN            Association of South East      Brunei Darussalam Cambodia Indonesia Laos Malaysia Myanmar Philippines
                           Asian Nations                  Singapore Thailand Vietnam

     CACM             Central American Common        Costa Rica El Salvador Guatemala Honduras Nicaragua
                           Market
     EC               European Communities           Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland
                                                           France Germany Greece Hungary Ireland Italy Latvia Lithuania
                                                           Luxembourg Malta Poland Portugal Romania Slovak Republic Slovenia
                                                           Spain Sweden The Netherlands United Kingdom

     GCC              Gulf Cooperation Council       Bahrain Kuwait Oman Qatar Saudi Arabia United Arab Emirates
     LAIA             Latin American Integration     Argentina Bolivia Brazil Chile Colombia Cuba Ecuador Mexico Paraguay Peru
                            Association                   Uruguay Venezuela

     MERCOSUR         Southern Common Market         Argentina Brazil Paraguay Uruguay
     NAFTA            North American Free Trade      Canada Mexico United States
                           Agreement

     PAN-ARAB         Pan-Arab Free Trade Area       Bahrain Egypt Iraq Jordan Kuwait Lebanon Libya Morocco Oman Qatar Saudi
                                                          Arabia Sudan Syria Tunisia United Arab Emirates Yemen

     SPARTECA         South Pacific Regional Trade   Australia New Zealand Cook Islands Fiji Kiribati Marshall Islands Micronesia
                           and Economic                    Nauru Niue Papua New Guinea Solomon Islands Tonga Tuvalu Vanuatu
                           Cooperation Agreement           Western Samoa



     Source: World Trade Organisation

RMIT University                                           Slide 7
    Trade flows - Australia’s Trade Policy

• Howard and Rudd governments have
  actively pursued bilateral and multilateral
  relations in light of slow progress in GATS.
• Australia’s two way trade in goods and
  services was worth A$488billion in
  2007/08.
       – Australia’s trade services rose 47% to
         A$17.9b – deterioration of deficit over the past
         year reflects stronger growth in imports
         relative to exports.
RMIT University             Slide 8
                           Australia’s trade policy
           Australia's Bilateral and Multilateral Agreements
           Free Trade Agreements in effect
               Singapore - Australia FTA (in effect since 2003)
               Thailand - Australia FTA (in effect since 2005)
               Australia - United States FTA (in effect since 2005)
               Australia New Zealand Closer Economic Relations (in effect since 1983)
               Australia-Chile FTA (signed in 2008)
           Free Trade Agreements under Negotiation
               Australia-ASEAN-New Zealand FTA Negotiations
               Australia-China FTA Negotiations
               Australia-Gulf Cooperation Council (GCC) FTA Negotiations
               Australia-Japan FTA Negotiations
               Australia-Malaysia FTA Negotiations
           Free Trade Agreements under Consideration
               Australia-India FTA Feasibility Study
               Australia-Korea FTA Study
               Indonesia-Australia FTA Feasibility Study



RMIT University                               Slide 9
                  Multi- or bilateral agendas
• Australian government has supported GATS round of
  negotiations, “Doha” (multi lateral approach).

• Recognising slow progress in Doha, the Australian
  government has moved swiftly to negotiate bilaterals.

• GATS is the lesser devil in trade liberalisation.

• Problem with bilateral and regional agreements is that
  entrenches some level of protectionism and partner
  preference.


RMIT University              Slide 10
                    Australia's trade in goods and services (current prices, $m)
                                                                                      % change     % change
                                          2005-06       2006-07          2007-08
                                                                                         2006-08      2007-08
  Imports                                    210,794        227,808        253,018          20%           11%

    Goods                                    154,425        169,535        184,148          19%            9%

    Services                                  41,849          46,112        50,962          22%           11%

  Exports                                    196,274        215,647        235,110          20%            9%

    Goods                                    169,716        183,527        204,935          21%           12%

    Services                                  41,078          44,281        48,083          17%            9%

  Total trade                                407,068        443,455        488,128          20%           10%

  Balance on trade                           -14,520         -12,161        -17,908         23%           47%

                                    Australia's trade in education related services…
    Imports                                     741                780         846          14%           8%
    Exports                                    9,745          11,109        13,710          41%          23%
                                        Education related services as a share of …
    Import services                              2%                2%           2%
    Exports services                            24%                25%        29%


  Source: DFAT, June Quarterly, 2008.


RMIT University                                         Slide 11
                        Trade flows – global trends
                      Does increase in imports and exports suggest integration into global trade?

  • In terms of imports (1953 to                             • In terms of exports (1953 to
    2007)                                                      2007)
     – Increase                                                 – Increase
                  •   USA (13.9% to 14.5%).                          •   Asia (13.4% to 27.9%).
                  •   Asia (15.1% to 25.3%).                         •   China (1.2% to 8.9%).
                  •   China (1.6% to 6.8%).                          •   Japan (1.5% to 5.2%)
                  •   Japan (2.8% to 4.4%)                           •   Europe (39.4% to
                                                                         42.4%).
            – Increase                                          – Decrease
                  • Australia and NZ (2.3% to                        • USA (18.8% to 8.5%).
                    1.4%).                                           • Australia and NZ (3.2%
                  • South and Central                                  to 1.2%).
                    America (8.3% to 3.3%).                          • South and Central
                  • Africa (7.0% to 2.6%).                             America (9.7% to 3.7%).
                                                                     • India (1.3% to 1.1% -
                                                                       fluctuated).
RMIT University                                   Slide 12
    Trade flow – Intra- and inter-regional trade 2007


                  How much of regional merchandise trade occurs within the same
                  region?
                                                         Region of destination
                                                      South and
                      Region of origin
                                        North America Central          Europe       Asia
                                                       America
                  North America                 51%            7%             18%          19%
                  South and Central America     30%           24%             21%          16%
                  Europe                         8%            1%             74%           8%
                  Asia                          20%            2%             19%          50%
                  Source: WTO, World Trade Developments, 2008.




RMIT University                                    Slide 13
                  People mobility – Migration
• Number of immigrants worldwide: 190.6 million
  or 3.0% of population (UN).

• Over 47% of the migrants from developing
  countries are believed to be residing in other
  developing countries.

• Migration flows in recent years, relative to
  population, are weaker than during the last
  decades of the nineteenth century. However it
  may change given current global economic
  turmoil.
RMIT University              Slide 14
                        People mobility – Flow of migrants
      Main source country of immigrants (Top 20)               Main destination country of immigrants (Top 20)
                  Source country       Immigrants
                                                               Destination country          Migrants
      Mexico                             11,502,616            United States                           38,354,709
      Russian Federation                 11,480,137            Russian Federation                      12,079,626
      India                               9,987,129            Germany                                 10,143,626
      Others (South)                      9,687,330            Ukraine                                  6,833,198
      China                               7,258,333            France                                   6,471,029
      Ukraine                             6,081,890            Saudi Arabia                             6,360,730
      Bangladesh                          4,885,704            Canada                                   6,105,722
      Turkey                              4,402,914            India                                    5,700,147
      United Kingdom                      4,158,909            United Kingdom                           5,408,118
      Germany                             4,095,015            Spain                                    4,790,074
      Kazakhstan                          3,710,351            Australia                                4,097,204
      Philippines                         3,631,405            Pakistan                                 3,254,112
      Italy                               3,459,027            United Arab Emirates                     3,211,749
      Pakistan                            3,415,952            Hong Kong, China                         2,998,686
      Morocco                             2,718,665            Israel                                   2,660,881
      Egypt, Arab Rep.                    2,399,251            Italy                                    2,519,040
      Poland                              2,316,438            Kazakhstan                               2,501,779
      Serbia and Montenegro               2,298,352            Cote d'Ivoire                           2,371,277
      United States                       2,261,443            Jordan                                  2,224,890
      Vietnam                             2,225,413            Japan                                   2,048,487
                             Source:
RMIT University                                     Slide 15
       People mobility – Migrants East Asia & Pacific

• Emigration
         – Number of emigrants: 19.3 million or 1.0% of population.
         – Top 10 emigration countries: China, Philippines, Vietnam,
           Indonesia, Malaysia, Thailand, Dem. Rep. of Korea, Myanmar,
           Lao PDR, Cambodia.
         – Identified destinations: high-income OECD countries (50.0%),
           high-income non-OECD countries (27.3%).
• Immigration
         – Number of immigrants: 4.4 million or 0.2% of population
           (compared to 190.6 million or 3.0% for the world).
         – Top 10 immigration countries: Malaysia, Thailand, China,
           Philippines, Cambodia, Indonesia, Myanmar, Dem. Rep. of
           Korea, Papua New Guinea, Lao PDR.

RMIT University                     Slide 16
                  People mobility – Migrants South Asia
 • Emigration
          – umber of emigrants: 22.1 million or 1.5% of population
            N
          – Top 5 emigration countries: India, Bangladesh, Pakistan, Afghanistan,
            Sri Lanka.
          – Identified destinations: high-income OECD countries (20.3%), high-
            income non-OECD countries (25.3%), intra-regional (34.5%), other
            developing countries (11.4%); unidentified (8.5%).
          – migration rate of tertiary educated (top 5 countries): Sri Lanka
            E
            (27.5%), Afghanistan (13.2%), Pakistan (9.2%), Bangladesh (4.7%),
            India (4.2%).
 • Immigration
          – Number of immigrants: 11.2 million or 0.8% of population (compared
            to 190.6 million or 3.0% for the world).
          – Top 5 immigration countries: India, Pakistan, Bangladesh, Nepal, Sri
            Lanka.

RMIT University                         Slide 17
Mobility of capital – Foreign direct investment (FDI)
• Foreign direct investment inflows raise to $1,833 billion in 2007 – an
  increase of 30% from previous year.

• Over the past 20 years annual growth has been in exceed of 20%
  pa.

• Financial and credit crisis will have a dampening effect on FDI in
  coming years.

• FDI inflows into developed countries grew faster than any other
  region.

• 68% of FDI inflows occurred in developed countries compared to
  27.3% for developing economies (14% SEA and Oceania).

RMIT University                 Slide 18
                  Mobility of capital - Remittances

• The total value of workers’ remittances in 2007 was
  estimated to be US$318 billion.

• Remittances represented 0.7% of total global GDP in
  2006.

• Inward remittance flows doubled between 2002 to 2007.

• The true size of remittances, including unrecorded flows
  through formal and informal channels, is believed to be
  larger.
RMIT University                Slide 19
                  Global production chains
• Offshoring of goods and manufacturing
         – Mexico’s experience under NAFTA (shift to
           China
         – Maquilas in the northern America corridor
           (presence of Korea, China and Taiwan)
•     Offshoring of services (ICT)
•     Outsourcing
•     Multi national enterprises
•     Re-exporting (Japan -> China -> USA).
RMIT University             Slide 20
                     Global diffusion of knowledge

• Education flows
         – Greater mobility of students across borders
         – Relevant bloc models
                  • Bologna Process (Europeanisation of Education)
                  • MERCOSUR agreement
                  • APEC – English language
         – Country partnering to support VET
           development
                  • Australia VET model in China, India and Latin
                    America
RMIT University                       Slide 21
                     Global diffusion of knowledge

• Science, Technology and Innovation
         – Encompassing international cooperation
                  • Research and Development
                  • Technology traffic
                     – Internet, Telephony,       Mobile, ICT
         – Patents
         – High value trade
                  • ICT, Technology-value add
                  • Service expertise.


RMIT University                        Slide 22
                  Production chains – changes in sectoral
                               employment
          Employment by sector, Australia and World Regions, 1996 and 2006
                                                                                   Sectoral employment in

                                                             Agriculture (%)           Industry (%)          Services %
                       Country / region
                                                             1996        2006*        1996    2006*         1996   2006*
          Australia                                                  5       3.6       22.4        21.1     72.5           75
                                                          meanwhile…

          Developed Economies & European Union
                                                                6.2          4.2       28.5        24.7     65.3      71.2
          East Asia                                           48.5          40.9       24.3        25.6     27.2      33.5
          South-East Asia & the Pacific                       51.0          45.4       16.5        18.6     32.5      36.0
          South Asia                                          59.7          49.4       15.2        21.0     25.1      29.6
          World                                               41.9          36.1       21.1        21.9     37.0      42.0




                                 Industries with largest workforce in selected economies
                                 - Manufacturing
                                  - Wholesale / retail trade; repairs of vehicles & goods
                                 - Real estate, renting and business activities
                                 - Health and social work
                                 - Construction

RMIT University                                           Slide 23
 What is that…? Changing the tune here… Policy changes
                                have greater impact than macro economics

                                                        Australia's historical growth in selected measures
                                                                                                                                                   Responding to
                   12%                                                                                                                             policy imperatives,
                                                                                                                                                   reviews and
                   10%                                                                                                                             sectoral reforms.

                   8%

                   6%
 Per cent change




                   4%

                   2%

                   0%
                         1987

                                1988

                                       1989

                                              1990

                                                     1991

                                                            1992

                                                                    1993

                                                                           1994

                                                                                  1995

                                                                                          1996

                                                                                                  1997

                                                                                                         1998

                                                                                                                1999

                                                                                                                       2000

                                                                                                                              2001

                                                                                                                                     2002

                                                                                                                                            2003

                                                                                                                                                     2004

                                                                                                                                                            2005

                                                                                                                                                                   2006

                                                                                                                                                                          2007
                   -2%
                                                                                                 Year
                   -4%
                                                                   Growth in real per capita GDP                Growth in real per capita HFCE
                                                                   Inflation                                    Growth in VET student numbers
                                                                   Growth in HE student numbers




RMIT University                                                                      Slide 24
       Growth in Australia’s tertiary education system
                      What do the numbers tell us about the Australian education sector without
                      the macroeconomic noise?


                  Growth in Australian student numbers in VET and HE and population
                                    aged 15 and over - 1987 to 2007

 12.0%

 10.0%

   8.0%

   6.0%

   4.0%

   2.0%

   0.0%
            1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
  -2.0%

  -4.0%

                   Growth in population aged 15+      Growth in VET student numbers       Growth in HE student numbers


RMIT University
                   Changes in VET numbers also respond to State policies
                                                    Slide 25
                     Emerging VET Issues - Global
• Massification of education – increased
  participation in tertiary education:
         –        Business
         –        Engineering
         –        Technology, ICT
         –        Science.
• Development national systems – retaining own
  nationals and attracting students from
  neighbouring countries:
         – China (attracting from Asia-Pacific)
         – India (attracting from Middle East)

RMIT University                     Slide 26
                  Emerging VET Issues - Global
• Pursuing domestic interests, emerging
  educ-hub countries setting own regulation
  approaches.
• Australia is a mature education market
  and seen as ‘aggressive’ marketer and the
  one to beat.
• Maturing emerging markets (e.g. China
  and India) are building own capability
  whereas new emerging markets are
  seeking more refined partnerships.
RMIT University               Slide 27
                       Emerging VET Issues - Global
• Target emerging educational markets:
         – Countries where rate of exports and imports
           are growing faster than GDP
         – Countries where exports and imports are
           considered high-value i.e. technology oriented
           products.
                  •   Pakistan
                  •   Sri Lanka
                  •   The Philippines
                  •   Vietnam
                  •   Turkey
RMIT University                         Slide 28
                  Emerging VET issues - Australia
Trade flows                  Mobility of capital           Mobility of people

    Diffusion of knowledge             Borderless production chains



  • Growth in domestic                               • Skill shortage in the
    and offshore                                       immediacy; short and
    participation                                      long term
  • Public and private
    financing                                        • Preparedness for
  • Ageing infrastructure                              workforce development
  • Governance and
    accountability                                   • Managing system
  • Institutional                                      reputation
    capability
RMIT University                           Slide 29
                   Participation
  • Proportion of the Australian population in the
    principal age group for education (5-24 year
    olds) has decreased – from 36% in 1965 to
    27% in 2006 (IGR 2007).
  • VET domestic participation rates are projected
    to increase slowly (IGR 2007).
  • VET annual rates fluctuate so growth is likely
    to be not greater than 2% per annum.
  • Balancing regional participation and provision
    of education.
RMIT University        Slide 30
                                Participation
• Growth in international numbers will
  depend on a number of issues
         – External forces
                  • Government responses to financial crisis (e.g.
                    rescue package; USA rebalancing trade deficit with
                    China; policy responses (e.g. protectionism of
                    certain industries)
         – Australian policy changes
                  • Migration levels
                  • Review of Innovation, Manufacturing, Education
                    and Training, et al.

RMIT University                      Slide 31
                    Financing

• Australian government spending on education is
  projected to grow in real per person terms – but
  overall spending is projected to fall slightly as a
  proportion of GDP from 1.85% in 2006-07 to
  1.78% in 2046-47 (IGR 2007).

• Ageing of the population detracts from growth in
  real education spending.

• The driver of real per person growth is the
  assumed indexation of costs per student by
  wages and educational participation rates.
RMIT University         Slide 32
                     People mobility - Skill migration
              Does Australia’s skilled migration intake inhibit, limit or represent an opportunity for
              Australian providers to educate, skill or up-skill people?


                                                     Skill migration
                                    as percent of total Australian migration program
                        80.0%
                        70.0%
                        60.0%
                        50.0%
                        40.0%
                                              50%
                        30.0%                                                                 70%
                        20.0%
                        10.0%
                         0.0%
                                 1997-98        2005-06              2006-07       2007-08    2008-09 Proj



                                           Australian Migration Program by year
          Category                               1997-98             2005-06     2006-07     2007-08     2008-09 Proj
          Skill migration                           77,880              97,340      97,920     108,540       133,500
          Other categories                          42,180              45,590      50,280      50,090        56,800
          Total migration                          120,060             142,930     148,200     158,630       190,300

        Source: Immigration Department

RMIT University                                           Slide 33
                         Financing

• Viability of VET providers may be affected
  by factors, e.g.
         – State governments funding approaches to
           ‘domestic’ enrolments
         – International demand in a tighter and more
           competitive environment.
         – Relative reputation strength of the system
           together with pathways alternatives.
           (Australian ranked #3).

RMIT University             Slide 34
      Expenditure on education as a % of GDP

                                Projected Australian government expenditure on education
                                                     (per cent of GDP)
                  1.4

                  1.2

                    1

                  0.8

                  0.6

                  0.4

                  0.2

                    0
                                      Schools                                    HE                            VET
                               2006-07      2011-12         2016-17    2026-27        2036-37   2041-42   2046-47   Aspiration
                  Source: Intergenerational Report, 2007.

              Aspiration reflects target we should aim for to support Australia’s ongoing
              development and investment in human force development.
RMIT University                                                       Slide 35
                                       Infrastructure
 • Expenditure on upgrading institutional facilities is likely to
   decline if government infrastructure programs are not
   specifically targeted to support VET.

 • Under current economic conditions, new facilities may
   not be built – a compound effect likely to be felt in years
   to come.

 • PPP – the new building pathways.

          To what extent education can leverage off Nation Building projects to support further growth
          in the sector given global competition?

RMIT University                                   Slide 36
                  Governance and accountability
•     Issues of structure and management
•     Responding to (greater) public scrutiny
•     Increase in legislative reporting requirements
•     Availability of performance data across all VET
      providers (both private and TAFE)




RMIT University               Slide 37
                  Institutional capability
•     Enterprise agreement
•     Ageing workforce
•     Workforce development – return to learning.
•     A new wave of productivity requirements.
•     Language and communication skills in a
      globalised education environment (cross cultural
      awareness)



RMIT University            Slide 38
                  Take away messages
• Education is a ‘truly’ globalised service industry – rapidly growing in
  developing and emerging economies.
• Implications of trade liberalisation in educational services have been
  underestimated and are not reversible. As a consequence changes
  are yet to be completely felt.
• Most countries entering into free trade agreements are including
  educational services into the mix, resulting in new entrants
  characterised in niche and labor-market driven markets.
• Examine more closely trade data to assess extent of emerging
  trends likely to have an impact on vocational education and training.
• Distinguish between training for the short to the medium and long
  term.
• Increased emphasis on service industries away from secondary
  industries (ie manufacturing) and primary (agriculture). This in turn
  result in urban growth.

RMIT University                  Slide 39
                   Take away messages II

• Broadening of education into the trading
  mix of developing nations (China, India, Middle East
      and Gulf countries, Vietnam, Philipines, Central and South America).

• Deepening of education, ie market
  segmentation, specific sustainable
  economic needs
         – PhDs in science, engineering and ICT,
         – Postgraduate in certain fields; secondary
           education.

RMIT University                    Slide 40
                       Post data




• An updated version of this presentation will be made
  available in December. This update will contain list of
  references, data sources and tables used to generate
  the charts.




RMIT University            Slide 41

								
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