As the COVID-19 pandemic places a spotlight on Australia's reliance on the international education sector, Asialink Business CEO Mukund Narayanamurti and Professor Philomena Leung argue that Australian universities could learn from their Asian counterparts.
Graduate business education is big business. Estimates vary, but this trillion-dollar global industry contributes significantly to Australia's fourth-largest services export of international education. Australia's services exports rose 10.2 per cent to A$97 billion in 2018-19. Tourism and international education together have accounted for over 60 per cent of total services exports.
The COVID-19 pandemic has only served to put a spotlight on Australia's reliance on this sector and provided what many feel higher education desperately needed for innovation – a burning platform. The Australian university sector faces losses of up to A$19 billion over the next three years.
To adjust to this changing landscape, Australian universities need to pay attention to three things.
The 'Asianisation' of Asia: Competing with Asia
Traditionally, the US, UK, Canada and Australia have been the recipients of considerable outbound student mobility flows of students from Asia seeking quality graduate business education. But, with the cost of business education steadily rising, a growing sentiment of the lack of relevance of an MBA for career advancement, and employer sponsorship decreasing, year-on-year trends are not looking favourable. However, regional (Asia) growth in MBA applications has defied the declining global trend.
According to the Graduate Management Admissions Council, half of the responding Asia-Pacific programs reported year-on-year growth in total applications. The demand for MBA graduates has only increased in the Asia-Pacific region, with 87% of companies surveyed (in 2019) planning to hire MBA graduates.
Australian graduate education providers also need to pay attention to the significant increase in the intra-regionalisation of student mobility in Asia. Government initiatives such as the Japanese Government's CAMPUS Asia and the ASEAN AIMS programs have sought to draw inspiration from Europe's ERASMUS program to develop a network among universities and government ministries in the region to drive greater intra-regional student flows.
Understanding perceptions of value: Catering to Asia
Watching student mobility trends provides useful insight into the shifting socio-economic factors that are driving perceptions of value. These vary significantly from country to country, and one-size certainly does not fit all. For example, when comparing the perceptions of value with prospective students from China and India there are some key differences. More than 70 per cent of prospective students from China have a budget of over US$30,000, and school reputation and location are key drivers of value. With India, where nearly 70 per cent of prospective students have a budget below US$30,000, career prospects and cost are key drivers of value.
In Vietnam, students tend to be the most brand-conscious, and rankings and university reputation play a significant role in decision-making. For prospective students from Indonesia, cultural familiarity is important, with options to stay closer to home favoured in the decision-making process. Understanding differing value propositions are not just important for recruitment, but for suitably customising programs for retention and graduate-outcomes.
The Australian imperative: Customising for Asia
Looking at some of the top Asian business schools, for example, the China Europe International Business School (CEIBS) and the National University of Singapore (NUS) Business School, it is easy to identify that their programs are truly global in nature. The other commonality with these two schools and the Indian School of Business (ISB), is the distinct emphasis they place on customising their curriculum to recognise family-owned businesses, a dominant business model across Asia.
Billions of Asians growing up in the past two decades have experienced geopolitical stability, rapidly expanding prosperity, and surging national pride. The world they know is one not of Western dominance but of Asian ascendance.
— Parag Khanna, The Future is Asian: Commerce, Conflict and Culture in the 21st Century.
Parag Khanna's quote is yet another reminder that Australian business schools cannot rest on their laurels.
Customising to recognise Asia's changing landscape is essential. Business schools must customise for an environment where listed organisations are not as prominent as they are in Western markets, where digital economy driven business models increasingly take precedence and where truly diverse case studies from across the globe, in particular of Asian companies and markets, need to be included in the curriculum.
Understanding target segments within each of the markets is also essential. For example, marketing to those with high academic preparedness and low financial resources requires a very different approach to marketing to those with high academic preparedness and high financial resources. Australian universities should generally seek to avoid the category of students with low academic preparedness, irrespective of financial resources, over the next decade, if they are to shift the perception of the quality of an Australian business education compared to what is offered by the US, UK and Canada.
Crisis accelerates change. Part of this transition process will involve taking the time to understand the complexity of serving diverse Asian markets. This is critical as we observe the rise of graduate business education providers in Asia who go from strength-to-strength due to their competitive advantages built on proximity, cost, customisation and targeted marketing. If traditional Western business education providers are to reverse the trend of declining application volumes, they will need to recognise, perhaps for the first time, the need to learn from their Asian peers.
Mukund Narayanamurti is Chief Executive Officer, Asialink Business
Professor Philomena Leung is Associate Dean – International, Macquarie Business School.
The comments in this article are based on reflections from a series of webinars presented by Asialink Business to Macquarie Business School on engaging with key Asian markets.
Banner image credit: Chris Stacey, Macquarie University.
 Trade and Investment at a glance 2020, Department of Foreign Affairs and Trade, 2020, https://www.dfat.gov.au/sites/default/files/trade-investment-glance-2020.pdf
 The pandemic pushed universities online. The change was long overdue, Harvard Business Review, 2020, https://hbr.org/2020/09/the-pandemic-pushed-universities-online-the-change-was-long-overdue
 Australian Investment in Education: Higher Education, The Mitchell Institute, 2020, https://www.vu.edu.au/sites/default/files/australian-investment-in-education-higher-education-mitchell-institute.pdf
 The Real Value of Business Schools, BIZEd AAXSB International, 2019, https://bized.aacsb.edu/articles/2019/may/the-real-value-of-business-schools
 Application Trends Survey Report 2019, Graduate Management Admissions Council, https://www.gmac.com/-/media/files/gmac/research/admissions-and-application-trends/application-trends-survey-report-2019.pdf
 Post-graduate degree continues to hold appeal with global firms, JapanTimes, 2020, https://www.japantimes.co.jp/2020/08/31/special-supplements/post-graduate-degree-continues-hold-appeal-global-firms/
 Internationalisation of Higher Education and Student Mobility in Japan and Asia, 2018, https://www.researchgate.net/publication/335890081_Internationalization_of_Higher_Education_and_Student_Mobility_in_Japan_and_Asia
 CAMPUS Asia (Collective Action for Mobility Program of University Students in Asia), National Graduate Institute for Policy Studies, https://www.grips.ac.jp/campusasia/en/about/
 The Asian International Mobility for Students (AIMS) program links the government ministries of Malaysia, Indonesia, Thailand, Vietnam, Brunei, and Philippines along with South Korea and Japan. SEAMEO RIHED is the Southeast Asian Ministers of Education Organization Centre specialising in regional higher education development, https://rihed.seameo.org/about-us/organisation/
 How Master’s students choose institutions, World Education Services, 2015
 Market Reports – Vietnam, BMI Global & Jackfruit Marketing, 2019, https://bmiglobaled.com/Market-Reports/Vietnam
 Recruiting from Indonesia in a context of increased competition, ICEF, 2019, https://monitor.icef.com/2019/09/recruiting-from-indonesia-in-a-context-of-increased-competition/