Emerging issues in Vocational Education
and Training:
Impact of Globalisation on Tertiary
Education
Presentation to VISTA forum
Angel Calderon
[email protected]
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
Sustainability *
Global diffusion of
knowledge ^
Global mobility of people
Internationalisation of
market for goods,
production and
services
Global mobility of
capital
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.
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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 unchartered 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
Asian Nations
Brunei Darussalam Cambodia Indonesia Laos Malaysia Myanmar Philippines
Singapore Thailand Vietnam
CACM
Central American Common
Market
Costa Rica El Salvador Guatemala Honduras Nicaragua
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
Association
Argentina Bolivia Brazil Chile Colombia Cuba Ecuador Mexico Paraguay Peru
Uruguay Venezuela
MERCOSUR
Southern Common Market
Argentina Brazil Paraguay Uruguay
NAFTA
North American Free Trade
Agreement
Canada Mexico United States
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
and Economic
Cooperation Agreement
Australia New Zealand Cook Islands Fiji Kiribati Marshall Islands Micronesia
Nauru Niue Papua New Guinea Solomon Islands Tonga Tuvalu Vanuatu
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.
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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
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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.
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Slide 10
Australia's trade in goods and services (current prices, $m)
2005-06
2006-07
2007-08
% change
2006-08
% change
2007-08
Imports
210,794
227,808
253,018
20%
11%
Goods
154,425
169,535
184,148
19%
9%
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%
Services
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
2007)
– Increase
•
•
•
•
• In terms of exports (1953 to
2007)
– Increase
USA (13.9% to 14.5%).
Asia (15.1% to 25.3%).
China (1.6% to 6.8%).
Japan (2.8% to 4.4%)
Asia (13.4% to 27.9%).
China (1.2% to 8.9%).
Japan (1.5% to 5.2%)
Europe (39.4% to
42.4%).
– Decrease
– Increase
• Australia and NZ (2.3% to
1.4%).
• South and Central
America (8.3% to 3.3%).
• Africa (7.0% to 2.6%).
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•
•
•
•
Slide 12
• USA (18.8% to 8.5%).
• Australia and NZ (3.2%
to 1.2%).
• South and Central
America (9.7% to 3.7%).
• India (1.3% to 1.1% fluctuated).
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
America
North America
51%
7%
18%
South and Central America
30%
24%
21%
Europe
8%
1%
74%
Asia
20%
2%
19%
Source: WTO, World Trade Developments, 2008.
RMIT University
Slide 13
Asia
19%
16%
8%
50%
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.
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Slide 14
People mobility – Flow of migrants
Main source country of immigrants (Top 20)
Source country
Mexico
Russian Federation
India
Others (South)
China
Ukraine
Bangladesh
Turkey
United Kingdom
Germany
Kazakhstan
Philippines
Italy
Pakistan
Morocco
Egypt, Arab Rep.
Poland
Serbia and Montenegro
United States
Vietnam
Main destination country of immigrants (Top 20)
Immigrants
11,502,616
11,480,137
9,987,129
9,687,330
7,258,333
6,081,890
4,885,704
4,402,914
4,158,909
4,095,015
3,710,351
3,631,405
3,459,027
3,415,952
2,718,665
2,399,251
2,316,438
2,298,352
2,261,443
2,225,413
Source:
RMIT University
Slide 15
Destination country
United States
Russian Federation
Germany
Ukraine
France
Saudi Arabia
Canada
India
United Kingdom
Spain
Australia
Pakistan
United Arab Emirates
Hong Kong, China
Israel
Italy
Kazakhstan
Cote d'Ivoire
Jordan
Japan
Migrants
38,354,709
12,079,626
10,143,626
6,833,198
6,471,029
6,360,730
6,105,722
5,700,147
5,408,118
4,790,074
4,097,204
3,254,112
3,211,749
2,998,686
2,660,881
2,519,040
2,501,779
2,371,277
2,224,890
2,048,487
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
– N
umber of emigrants: 22.1 million or 1.5% of population
– Top 5 emigration countries: India, Bangladesh, Pakistan, Afghanistan,
Sri Lanka.
– Identified destinations: high-income OECD countries (20.3%), highincome non-OECD countries (25.3%), intra-regional (34.5%), other
developing countries (11.4%); unidentified (8.5%).
–
Emigration rate of tertiary educated (top 5 countries): Sri Lanka
(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.
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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).
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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.
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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).
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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
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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.
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Slide 22
Production chains – changes in sectoral
employment
Employment by sector, Australia and World Regions, 1996 and 2006
Sectoral employment in
Country / region
Agriculture (%)
1996
Australia
2006*
5
Industry (%)
1996
2006*
Services %
1996
2006*
3.6
22.4
21.1
72.5
75
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
meanwhile…
Developed Economies & European Union
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
policy imperatives,
reviews and
sectoral reforms.
12%
10%
Per cent change
8%
6%
4%
2%
Year
-4%
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Growth in real per capita GDP
Inflation
Growth in HE student numbers
Slide 24
Growth in real per capita HFCE
Growth in VET student numbers
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
-2%
1987
0%
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+
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Growth in VET student numbers
Changes in VET numbers also respond
to State policies
Slide 25
Growth in HE student numbers
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)
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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.
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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.
•
•
•
•
•
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Pakistan
Sri Lanka
The Philippines
Vietnam
Turkey
Slide 28
Emerging VET issues - Australia
Trade flows
Mobility of capital
Diffusion of knowledge
Borderless production chains
• Skill shortage in the
immediacy; short and
long term
• Growth in domestic
and offshore
participation
• Public and private
financing
• Ageing infrastructure
• Governance and
accountability
• Institutional
capability
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Mobility of people
• Preparedness for
workforce development
• Managing system
reputation
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.
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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.
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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.
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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
Skill migration
Other categories
Total migration
1997-98
77,880
42,180
120,060
Source: Immigration Department
RMIT University
Slide 33
2005-06
97,340
45,590
142,930
2006-07
97,920
50,280
148,200
2007-08
108,540
50,090
158,630
2008-09 Proj
133,500
56,800
190,300
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).
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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
2006-07
2011-12
HE
2016-17
2026-27
VET
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?
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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)
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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)
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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.
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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.
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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.
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Slide 41