The Coronavirus outbreak is the dreaded 'Black Swan' event that has hit the Australian economy and the international education sector – notably the large universities. Many articles were written on the over-reliance on Chinese students by the university sector in Australia, but no one expected the overnight shutdown of the top source country. A terrible situation for thousands of Chinese students stuck with travel bans waiting to come to Australia.
What are the differences and lessons and opportunities from this situation? We should not be surprised as Australia went through a similar time in 2003 with SARS with slumping travel and education export. The difference was that there was a smaller number of international students, and Australia had a better balance of nationalities. Currently, in some Go8 university classes, there are high percentages of students from China that reduces the international/Australian study experience of these students and the study experience of Australian and other nationality students that can resent the imbalance in the lectures and tutorials.
The opportunity is for universities to open their doors to smaller and boutique agents that service markets in Europe, Latin America and even in NE and SE Asia and start working harder for students in other markets to achieve a better balance.
Instead of talking about trying to achieve better diversity of students, Universities can now take some action. Universities have kept tight control on who can be an education agent to represent them, and one of the main criteria was an ability to deliver students in bulk. Minimum numbers such as 15 students per annum and above are not uncommon as the requirements to be a university education agent. Lesser numbers of students from an agent seem to be too hard to monitor and handle, and contracts for smaller agents were cut on failure to achieve targets. High targets led to the growing reliance on large agents (with many sub-agents) from China and India as the preferred business model. ELICOS colleges, VET and pathway colleges, handle extensive networks of education agents to maintain a diversity of nationalities as a point of difference. Online CRMs and systems now make it much easier to handle tracking and data of channel partnerships.
Also, it is time for universities to recognise that unlike universities, many agents have already 'de-risked' their businesses and now cover multiple countries either physically or through online presence. Universities still box agents into strict 'regions' where they can recruit. Opening to more agents would lead to fewer sub-agents with more transparency in the agent/provider relationship, a wider variety of agent size and nationalities. It would be better to have fewer international students from a broader range of nationalities. Universities must take a less revenue-driven view from their marketing departments allowing smaller agents to have a direct agency agreement and not cutting contracts straight away for failing to achieve onerous targets.
As taught in their business schools, universities should not have such a risky business model relying on one market for such a large percentage of their revenue. Black Swan events do happen, and a market shut down is always a possibility. Diversification of nationalities makes sense in academic and business perspectives and better study experiences for all students.
Robert Parsonson
Executive Officer
International Student Education Agents Association (ISEAA) iseaa.org.au
ISEAA has the mission to be the peak body for education agents in Australia.