Geopolitics and the Australian higher education sector

Factors and trends in international education for 2023

Australia is the third largest recipient of international tertiary students worldwide, a status which has been underpinned by a series of favourable ‘push’ and ‘pull’ factors. Australia’s lifestyle, geography, institutional reputation, and quality of teaching have attracted students from across Asia and further afield to our universities. However, both the push and pull factors are becoming increasingly subject to geopolitical uncertainty: it is time for Australia to take stock of the situation and our options.

During the higher education Golden Age, our universities became dependent on international student numbers and revenues to cross-subsidise other activities. International education directly supported growing global prestige and funded improved research performance. In turn, correlated research rankings performance further enhanced the attractiveness of Australian higher education to the growing population of international students, creating a highly successful and self-fulfilling business model.

International higher education has grown into a highly complex and sophisticated business. Australia’s universities have a multitude of arrangements including onshore, offshore, and digital provision. These arrangements cover a wide variety of courses and disciplines, with a multi-layered ecosystem of pathway providers and recruitment channels. Much of this grew organically, arising from Australia’s long-standing history in the provision of international higher education since the original Columbo Plan and the desire to leverage higher education as a tool of broader international diplomacy and trade. Coinciding with the system’s massification and reduction in per student public funding for domestic education, our system quickly became highly internationalised, with Australia’s tertiary system becoming the second most internationalised in the world.

This business model came to a sudden halt in 2020, although predictions of market downturns and failures had been prevalent for many years. While international students are returning to Australian universities in numbers almost as high as pre-COVID levels since borders reopened in December 2021, not all institutions are benefiting equally, with research suggesting that larger, more prestigious universities are benefitting the most from students coming back.

What next?

While the university sector is recovering from the dramatic impact of the COVID-19 pandemic, ongoing geopolitical volatility in 2023 means that the Australian higher education sector cannot become complacent.

The probability of more pandemics in the future is just one of the disruptions that could affect Australian higher education in the future. Fortunately, there are a number of strategies that can be adopted to support Australian higher education in the face of growing geopolitical volatility.

Universities can:

1. Refresh strategic risk frameworks taking into account current geopolitical risk.
2. Establish great international student experience (SX) for each target market.
3. Extend partnerships and alliances to manage geopolitical risk.

Governments can:

1. Refresh Australia’s national ‘Go to Market Strategy’.
2. Leverage international students as a key driver of economic recovery.
3. Bolster support for diversification.

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