By Dezso J. Horvath, Special to the Financial Post, November 6, 2012
Dezsö J. Horváth is Tanna H. Schulich chair in strategic management and dean of the Schulich School of Business at York University.
Canada has a golden opportunity to make up lost ground by capitalizing on one area where we have the potential to be an economic powerhouse: higher education. The fact is, education is a knowledge-intensive export. It also happens to be a service we’re very good at providing: The best Canadian colleges and universities deliver education programs at a level that few other countries can match, available in both official languages. A number of our universities consistently rank among the best globally, as do a number of Canadian business schools and specialized programs in disciplines and fields ranging from aquaculture to computer animation.
Already, higher education is Canada’s eighth-largest export sector, contributing some $7.7-billion to the national economy in 2010, according to Foreign Affairs and International Trade Canada. (Education exports include foreign students studying in Canada, as well as the delivery of educational programs in foreign countries by Canadian-based schools, whether by satellite campus, institutional partnering or online learning.) To cite one example, in 2008 Canada’s No. 1 export to China was not wheat or oil but education, bringing in $1.3-billion in revenues.
Yet so far, Canada — with a market share of about 5% — has barely tapped into the growing demand for higher education. With global enrolment in higher education expected to grow from 3.3 million students in 2008 to approximately eight million by 2025, the Canadian economy has much at stake. We have all the right ingredients to become a leading supplier to Asia, Latin America and the Middle East, where new demand is emerging faster than many countries in those regions can meet it. Along with Canada’s excellent schools, multicultural welcome mat, stable financial system and high quality-of-life cachet, we can become a world leader in higher education, right alongside the U.S. and the U.K., which together command about one-third of the global market. If we don’t step up to supply the new demand for knowledge, other hungrier countries will.
In terms of the number of foreign students enrolled in higher education, Canada currently places fourth among English-speaking countries, behind third-place Australia. It’s time for Canada to tear a page from the lesson book of Australia and the U.K., which have been immensely successful in marketing abroad by employing a countrywide, unified approach to the branding and marketing of their higher education offerings. Our ad hoc, province-by-province campaigns and highly fragmented approaches have not served us well.
International students inject badly needed funding into both our post-secondary education sector and the national economy. Because foreign students pay a lot more in tuition on average than Canadian students, they provide a critical revenue stream that can be reinvested to maintain and enhance the quality of faculty, infrastructure and programs at Canada’s post-secondary institutions, allowing our schools to remain globally competitive. These higher fees contribute significantly to our national economy: In a 2009 report prepared by Roslyn Kunin & Associates for Foreign Affairs and International Trade Canada, international students enrolled in post-secondary studies in Canada pumped $6.5-billion into the Canadian economy and helped generate more than 83,000 jobs. And if we doubled or tripled our intake of international students, the economic spinoffs would likewise grow significantly.
Bottom line: Canada could easily expand our global market share in the decade ahead. In fact, this is already happening for Canadian business schools, which have experienced the fastest growth worldwide in foreign student applications in recent years, according to the OECD, largely as a result of friendly visa conditions. While the U.S. and U.K. have been closing their doors to foreign students by curtailing visas and making it harder to stay and work in those countries after graduation, Canada relaxed its rules in 2008 to allow international students enrolled in a two-year master’s or MBA degree program to work here for three years following graduation.
Canadian business schools in particular have taken a more transnational approach by providing degrees in foreign markets. The Ivey School of Business at the University of Western Ontario, for example, has been delivering an executive MBA in Hong Kong and the Schulich School of Business at York University has been delivering an MBA in Mumbai. When Schulich’s new Hyderabad campus opens in 2013, Schulich will be uniquely positioned as the first foreign school in India to deliver a standalone MBA when that country fully opens its doors to foreign educational institutions.
As the Canadian government considers how to make higher education a key plank in Canada’s global economic strategy, it should explore ways to align our education goals with our immigration and trade policies. Foreign students can augment our access to the skilled knowledge workers that the Canadian economy needs to grow, for instance. Student visas could be further enhanced to offer a more expedient pathway to landed immigrant status and eventual citizenship. And future trade agreement negotiations should seek to open up new markets for Canadian education exports.
Canada’s successful adaptation to the new global education age will require a new way of thinking, one that not only seeks to bring in more students but also to expand into rapidly growing, untapped markets.