Australian Association for Research in Education

International Education Research Conference

2-6 December 2001, Perth

2.45 pm, Monday 3 December:

Symposium on Academic Capitalism in the Enterprise University:

Simon Marginson

Monash Centre for Research in International Education

Simon Marginson is a Professor of Education at Monash University, Melbourne, Australia, the Editor of the Australian Journal of Education and Director of the Monash Centre for Research in Education. He is the coauthor (with Mark Considine) of The Enterprise University: Power, governance and reinvention in Australia, Cambridge University Press 2000.

As the fifth largest provider of international education, along with the UK the most commercial in approach, and focused on generic Anglo-American Business and Computing courses, Australian higher education is a primary agent of neo-liberal globalisation in education. This does not necessarily strengthen Australia’s universities, political economy or cultural self-determination. The revenues from international education have not substituted for the lost public funding, being largely absorbed in the costs of raising those revenues or in other corporate operations (part-time teaching in Business, recruitment, marketing, off-shore offices, finance and risk management, quality assurance etc.). The result is serious tensions between global development and local-national capacity and quality: commercial boom within an impoverished public infrastructure. While international students have grown from 25,000 (1990) to 83,000 (1999), the overall student-staff ratio has risen from 12 to 1 (1990), to 18 to 1 (1999). Total public and private funding shows little decline, and the corporate side of universities is growing apace, but Australian higher education is in the throes of a serious crisis, one that is imperfectly concealed by techniques of marketing and quality assurance.

This paper is about the commercial provision of on-shore international higher education in Australia - which has grown remarkably in the last decade - in the context of Australian higher education as a whole; and the world-wide development of international education as a global market, noting Australia’s geo-strategic location in that market. The paper uses statistical data from government sources and takes a national policy-level overview, though from the perspective of independent scholarship rather than government. The paper looks at growth in the number of international students, where they are from, the courses they do and their levels of study; and considers the income generated for international education and its centrality to the financing of Australian higher education in the 1990s. Overall material trends in Australian higher education are noted, and the paper summarises the relationship between international and domestic education. Finally, it draws attention to tensions and contradictions in Australian higher education associated with - though not solely determined by - international education.

These tensions are understood as (1) tensions between the expansion of the global market in international education, and local-national capacity in higher education; and (2) tensions between a global market construction of international education, and the potential for a meta-national program of international education guided by social and cultural values rather than the generation of revenues per se, and focused on long-term international relations.

The paper does not discuss the detailed provision of international education in individual universities; nor data on teaching and learning, language policy and student servicing; nor the views of international students and international education providers. (However, these matters are addressed in Marginson and Rizvi, in progress). The paper is confined to on-shore international education in Australian public universities. It contains no data on the off-shore campuses of Australian universities or twinning and franchising arrangements. It does not address the many issues involved in the development of on-line distance education; nor issues related to national, international and global systems of regulation (McBurnie and Ziguras, 2001) such as the emergence of quality assurance as a tool for ordering the global market.

The term ‘international’, inter-national (nation-to-nation) refers to relationships between nations; relationships that are bi-lateral or multi-lateral. In its original usage ‘international education’ simply referred to students moving from one nation to another, though it has come to mean a larger cross-border system of educational provision involving many nations.

The terms ‘globalisation’ and ‘global’ are subject to varying understandings. On one hand, ‘global’ can be used as a neutral descriptor of cross-border relationships that extend beyond the international; to meta-national phenomena at the level of the world, and regions larger than a single nation, such as the European Union (EU) or Mercosur. It might refer to climate or cultural icons or message systems or currency union. In this context ‘globalisation’ simply means becoming ‘global’, and captures the growing role played by meta-national phenomena and relationships. Here the most striking form of globalisation is not trade or the mobility of production, where cross-border relations have a long history, but instantaneous screen-based telecommunications, and migration and other cross-border people movement including travel for educational purposes. World convergence is highly uneven and over-determined by relations of power, inequality and domination/ subordination. Global movement and messages can create new freedoms and possibilities. We benefit from such possibilities at this conference. But not every one in the world can use the internet or buy a plane ticket, not everyone hears their own language in global media, not everyone experiences self-determination. Some zones are isolated, others are engaged in their own terms and by their own choice, and others are engaged at their own cost and against their will. The character of such relationships is not determined by structure alone, by whether they are world-wide (‘global’) or local in form. It is determined by history and power, by economy and culture.

On the other hand ‘globalisation’ can be understood as referring to a particular ideological and hegemonic version of meta-national relations. This is the neo-liberal idea of the world as a global economic market, dominated by the leading economic powers and mono-linguistic (English) and monocultural in character. The finance sector everywhere, which is increasingly meta-national in structure and culture, has energetically propogated this idea of ‘globalisation’ as world market. For those on the receiving end, this form of ‘globalisation’ has come to stand for the extension of hegemonic, economistic and largely economic relationships into the sovereign terrain of nations and the mind-space of indigenous communities: the drawing of local sites all over the world into common economic and cultural forms mostly derived from the USA. This is the ‘globalisation’ of neo-classical economics, in government and corporate circles, in the media and often in popular understandings. Correspondingly, this ‘globalisation’ is the target of the protest movements that contest the neo-liberal ordering of the world.

This author has used ‘globalisation’ in the first, neutral sense, claiming the potential for ‘global’ relationships beyond the neo-liberal vision (for example Marginson and Mollis 2000). Nevertheless given the content of other papers at the conference, to avoid confusion this paper will use ‘economic globalisation’ to refer to neo-liberal globalisation. ‘Meta-national’ and ‘world convergence’ will be the terms used more generally for phenomena and relationships that extend beyond the national and inter-national; including the good, the bad and the ugly.

Bi-lateral international education is as old as nations themselves, but after world war two it grew markedly through both individual (student-to-university) and public (government-to-government) initiatives. By 1980 there were about one million ‘foreign’ students, students studying outside their own countries. The last two decades have seen an accelerating growth in educational traffic, especially between the emerging middle classes in developing nations and OECD countries such as USA and the UK. A commercial form of international education has also become increasingly important, particularly in the UK and Australia where since the 1980s the respective national goverments have allowed individual universities to charge full-cost fees and retain the revenues. This kind of international education constitutes a ‘global market’ in the twin sense that it functions as an identifiable economic market with competition between producers, commodity relations, etc.; and in the sense that it is ‘global’ in its expansionary dynamic, economistic bias and hegemonic character. It is taught in English, and often implicated in the values and practices of globally oriented Anglo-American business.

The term ‘market’ is often applied loosely to international education as a whole, including the enrolment of foreign students in the USA which is the largest single provider. To generalise briefly across a large field with much internal diversity: in the USA some international students in private universities pay high fees, but international education is not dominated by commercial objectives. It is permeated by objectives related to national strategic interests and foreign relations; foregrounds values related to foreign aid, pedagogy and pastoral care; and is partly subsidised by universities, governments and private agents such as donors, foundations and corporations. Although (and because) US international education is hegemonic on a world scale, it is less economistic in character than in the UK and Australia. There are signs that some American universities are now giving greater priority to the revenue-raising potential of foreign student enrolment, given the declining role of State government financing in budgets.

The rise of international education is both an effect and a cause of world-convergence. Cheaper and more frequent transport and instantaneous communication facilitates the provision of information, marketing and recruitment, the passage of students from one country to another and (providing they have the economic means) their continuing contact with home and local-national sites during the period of study. Living in two places, students sustain multiple and hybrid identity, bi-national and meta-national in character (Appadurai 1996). For families, the cultural risks inherent in international education have been reduced. International education shares these dynamics with migration, with which it is often directly associated. Some nations, including the USA, use international education to attract potential migrants with high research potential or useful business-related skills. Recently Australia amended its migration criteria to provide greater advantages to applicants with Australian degrees.

Conversely, cultural mixing and hybridity in international education, helping to build meta-national association forms of association, furthers the convergence of middle class and professional social layers on a world-scale. International higher education prepares people for strategic national sectors such as government and finance; and for the geographically mobile professions. One of these professions is teaching and research in universities. Major universities are themselves shapers of the meta-national and the global. On one hand universities respond to world markets and world-convergence: on the other hand universities contribute to meta-national knowledges, languages, systems, products, communities. They also help to construct national identities in the meta-national environment. Generally, this capacity for world-affecting innovations is limited to the leading institutions, and determined also by the strength of other sectors of the nation such as government and corporations. Like nations, universities are subject to combined and uneven development on a world scale. In the last analysis American universities are strong in the geo-strategic sense largely because other American sectors are strong, and they draw support also from hegemonic international agencies such as the World Bank that are located in the USA.

Commercial international facilitates the building of meta-national association and of universities as world institutions, but channels those developments into the neo-liberal form of globalisation. Its central purpose is not the incidental effects of cultural enrichment or pedagogical encounters with ‘difference’, but making money. In terms of relations of power, the commercial education of students from developing countries by ‘first world’ universities - aided by new communications technologies permeated by Americanisms - speeds the global colonisation of local cultural spaces. For developing countries there is much at stake. Developing countries want to be part of the meta-national dimension but on their own terms (though here ‘their own terms’ are fluid under global pressure). The governments of these countries need to provide the emerging middle class with educational opportunities, though they would prefer to expand their domestic systems and to extend education to all classes. Education systems are central to the construction of national unity and identity and to national forms of modernisation. But Malaysian students studying in Australia or the UK do not learn a Malaysian curriculum, they learn an Australian or British curriculum. Often it is a generic Anglo-American curriculum, in Business Studies and Management [hence forth ‘Business Studies’], or Computing/ Information Technologies/ Communications [henceforth ‘Computing’]. These courses are universal in cast and their effects tend to be homogenising. Graduates often enter Americanised, globally mobile occupations such as trade, finance and computing. They become agents of the global, either from a distance or bringing it all back home. International education facilitates the formation of a global elite; characterised by varying hybrid identities while at the same time linked by a universal business culture. Its individuals fashion their lives in terms of private career rather than national citizenship.

International education brings with it the positive potential for more frequent and more intensive two-way cultural encounters with ‘difference’. Some of the educational flows between countries - for example between certain countries in the EU, or between the USA and UK - are cross-national exchanges with significant numbers of students and staff moving in both directions. Nevertheless, on the world scale only a small number of OECD countries are major providers of international education (Table 1), while a much larger number of countries are receivers. Inevitably, this uneven geo-structure lends to international education the character of a homogenising force; and sustains its potential as a hegemonic force. All major provider countries contribute to cultural homogenisation: the extent of homogenisation varies depending on degree of variation, and cultural sensitivity, in the international education program. By no means all of these countries are exercising global hegemony, however.

Table 1 Main country providers of tertiary international education, 1995

Includes non-university tertiary enrolments. * 1994 ** 1993 Source: UNESCO Statistical Yearbook

Four of the top seven provider/ exporters are English-language countries. Among this group the domestic impact of international education varies. In the USA in 1998, 3.2 per cent of all students were international students, which was less than in many European countries although in aggregate terms the USA is the largest provider. International education is more important in the UK, and Australia where it constituted 12.6 per dent of all university students, the second highest internationalisation of enrolment in the OECD after Switzerland (Table 2).

Table 2 International students as a proportion of all students in

* For Australia, universities only. Source: OECD 2000

The large providers also vary according to their strategic position in the international market terms (the prestige of their institutions and courses), and in the balance of fields of study and levels of study. For example, the USA research universities carry more prestige than their counterparts in elsewhere, reflecting the world-wide US hegemony and the material wealth in American universities, which garner 2.6 per cent of national GDP per year (Table A2). The USA is also known for its strength in biotechnologies, communications and information technologies, and business education. The UK is known for its strengths in sciences and humanities, France in the humanities, Germany in industrial technologies and so on. Australian universities do not have equivalent field-based reputations, and the leading teaching universities are not as well known as in the USA and UK. Despite this Australia has become a strong trading nation in international education, and very strong in relation to its size. Indeed, Australia’s position in the global market in international education is significantly better than its overall trading position and competitive economic position.

In 1997, Australia’s per capita GDP was USD $22,582 in Purchasing Power Parity terms (OECD 2000). This was eleventh on the OECD table. The USA with $29, 401 was second highest after Luxembourg. Australia is a lower-middle ranking ‘first world’ economic power with 2 per cent of world trade and a population of 19 million compared to 270 million in the USA. Australia has a long history of shortage of local capital, chronic dependence on capital inflow, high vulnerability to commodity trade fluctuations and currency fluctuations, and an economy that has been a 'branch office’ of the UK and then the USA. Australia’s also has an uneven relationship with the emerging ‘global knowledge economy’: for example IT and internet penetration is high but exports of information and communications (ICT)-related products are relatively weak (Considine et al 2001).

How then have Australian universities become high volume producers in one of the emerging global markets in education, that for on-shore teaching services?

First, the international education industry in Australia has benefited from an early and thoroughgoing commercialisation. Until 1985 the Australian international education program was based on foreign aid rather than trade objectives. Places were subsidised by government and subject to quotas. From 1980 private students paid a ‘visa charge’. In 1988 it was decided to adopt a fully commercial approach in which all places would be subject to full-cost fee arrangements, though some fees would continue to be paid by the Australian government or home governments. The move to a fully capitalist approach followed the UK but was ahead of potential English-language rivals Canada and New Zealand.

Second, Australian higher education has enjoyed a generic national reputation for good quality higher education. This reputation is seen to apply to all institutions. There is a widespread perception that Australian universities, which are nearly all funded public universities, are ‘government guaranteed’, reducing the apparent risks involved in choosing particular universities. UK universities enjoy the same advantage for similar reasons, but American higher education does not. In Australia this favourable long-term reputation accumulated as a result of the level of public funding of higher education between 1965 and 1985 (Table A3). In the mid 1970s this exceeded 1.4 per cent of GDP, in the top third of OECD countries. As a result research became relatively strong in areas such as agriculture, the geo-sciences, astrophysics, mathematics and parts of medicine and the life sciences. Some Australian universities developed strong international research reputations, particularly the Australian National University in Canberra, creating a ‘halo’ effect benefiting the system as a whole. (Public expenditure patterns after 1985 were different: see below). From the legacy of the development of Australian education in 1965-1985, commercial international education drew the generic reputation rather than the discipline-based potential: it became focused not so much on content strengths specific to Australia, but primarily on homogenous globalised products provided in much the same manner in the USA and UK. In this context, questions of location and comparative costs and geographic location vis a vis the other English-speaking countries became crucial elements in determining the commercial success of the program.

Third, Australia has locational advantages. Australian cities are regarded as generally clean and safe; and the Australian climate ranges from temperate to tropical and is mostly warmer than the Atlantic nations. Transport costs between Australia and South East Asia are relatively low.

Fourth, during the 1990s Australian tuition fees were on the whole lower than fees in North America and the UK. A weak Australian dollar helped maintain the price advantage, sustaining a rapid rate of growth in international student enrolments even during the ‘Asian downturn’ of 1998.

Once the market was established, universities were permitted to set fees at cost or above; and could enrol any number of international students. From 1990 to 1999, on-shore international students rose from 24,998 to 83,111, reaching 12.1 per cent of all students (Table 3).

Preliminary data show that in 2000 the number of international students grew by 15.0 per cent to 95,540, continuing the pattern of rapid growth. At the same time domestic student numbers fell by 0.5 per cent, neatly summarising the growing divergence between the domestic higher education economy and the international higher education economy.

All comprehensive doctoral universities enrol fee-paying internationals but student numbers, and hence the level of dependence on international student revenues, varies significantly between universities. The largest on-shore enrolment is at the Royal Melbourne Institute of Technology (RMIT) which in 2000 had 9035 international students, almost one third of the total student body. RMIT also has many students off-shore. Other major concentrations are at Monash and Melbourne universities in Victoria, the University of New South Wales and Charles Sturt University in New South Wales, Curtin University of Technology in Western Australia, and the University of South Australia. Table A4 has details.

Table 3 On-shore international students * as a proportion of all higher education students, 1989 to 2000

* in all tables, ‘international students’ includes only on-shore students, i.e. foreign source students educated in institutions in Australia, which excludes on-line distance students, students in off-shore campuses, ‘twinning’ enrolments etc. Source: DETYA statistical collections

The bulk of Australia’s international students are drawn from East and South East Asian Chinese families, mostly in the diaspora in Singapore, Malaysia, Hong Kong, Taiwan and Indonesia (Table 4). In 1999, 53.0 per cent of students were from Singapore, Malaysia and Hong Kong which like Australia were once British colonies. There are relatively few students from Africa and Latin America. South Asia, where many students have English-language skills, has been the object of intensive recruiting but has yet to provide students on the scale of South East Asia. India is the sixth largest source but provides only 3.6 per cent of entrants.

Demand from the main source countries has grown because in those countries rising incomes per head have coincided with an inadequate supply of places in domestic higher education; because of discriminatory entry policies in Malaysia; and because of the perceived advantage of international credentials. Significant numbers of students from these countries also study in the UK, and some are in the USA. Continuing high entry into Australia depends on maintenance of Australia’s cost advantage and reputation for adequate quality and equivalence with British universities, plus the maintenance of the shortage of home country places.

Thus within the international student program the majority of students form a relatively coherent group, both economic terms (they share the private means to pay fees) and in educational and cultural terms (they share an Anglo-Chinese heritage and education systems that use English widely and are similar in some respects to Australia’s). Because their English-skills are relatively good, the average cost of preparation for study in Australia is reduced, teaching is eased, and most people in Australian universities, like their English language colleagues abroad, are able to avoid the deeper challenges of multi-culturalism. The participation of Anglo-Chinese students has framed the norms of international education. Students from Indonesia whose English-language skills are weaker can have a difficult time.

Table 4 Countries of origin of on-shore international students, 1999

Source: DETYA statistical collections

As noted, and as Tables A5 to A9 explain in more detail, the Australian international education program is increasingly dominated by Business Studies and to a lesser extent Computing. In 1998 more than half of all international students were enrolled in Business, followed well back by Computing and Science, the Humanities and Social Sciences, Engineering, and Health Sciences. There were relatively few international students in the nationally-specific areas of Law and Education. Table A6 shows that domestic students were more evenly distributed across the fields. Similarly, in 1998 the majority of all international graduations (53.7 per cent) were in Business Studies. Internationals constituted almost one third of all graduations in Business, and international Business students represented almost one in every ten graduates from an Australian university that year (Table 5).

Table 5 International graduates by field of study, 1998

Source: DETYA statistical collections

In 1999 international students constituted 24.9 per cent of all student load in Business, compared to 8.1 per cent in 1989. In Computing the international student share rose from 8.3 to 21.6 per cent (Table A9). The growth of international Business Education was the trend of the 1990s in Australian higher education, especially after 1995, with graduations increasing at an average of more than a thousand per year (Table 6). Business and Computing grew in importance at the expense of all other fields except Health Sciences. There was been a significant decline in the proportion of international students enrolled in Engineering and Science, once mainstays of international education in Australia. While Engineering graduates increased in the 1990s, and in 1998 almost one fifth of all Engineering and Surveying graduates were internationals, only 6.9 per cent of all international graduates were in those fields, compared to 15.5 per cent in 1989. Meanwhile the proportion of international graduates who were from Business rose from 32.7 to 53.7 per cent (Tables 7 and A5).

Table 6 Growth in the number of international Business Studies graduates, 1988 to 1998

Source: DETYA statistical collections

Table 7 Proportion of all international graduates from Business, and Engineering, 1988 to 1998

Source: DETYA statistical collections

The proportion of total international student load enrolled in Science (excluding Computing and Mathematics) fell from 12.3 per cent in 1989 to 5.0 per cent in 1999. At the same time the Enginering share fell from 11.9 to 7.5 per cent, while the Business share rose from 31.9 to 45.1 per cent (Table A7). In 1989 international Engineering and Science together constituted three quarters of the student load of international Business Studies. In 1999 the ratio was one quarter. Australia’s global role is shifted from the provisions of business-related skills and advanced technical skills and scientific capacity, to an overwhelming emphasis on the former.

Table 8 Growth in graduates from higher education, international and domestic students, 1995 to 1998

Source: DETYA statistical collections

The trend in international graduate numbers has diverged sharply from the parallel changes for domestic students, especially since 1995. Between 1990 and 1998, the total number of graduates increased by 70.6 per cent. Once the international graduates are separated out, the total increase in domestic graduates is less, 52.1 per cent: international graduates increased by 398.2 per cent. In the post 1995 period (Table 8), domestic graduations in Business grew more slowly, 23.9 per cent, but international business graduates jumped by 112.8 per cent. Domestic graduations in all other disciplines rose by only 3.7 per cent, while international graduates in other fields rose by 53.5 per cent. Taken overall, more than half of the total growth in graduate numbers (11,208 out of 20,691) was international students. Well over half the total growth in graduate numbers (12,801 out of 20,691) was in Business Studies.

At the same time there has been a related set of changes in the type of course enrolled in by the internationals: great growth in coursework Masters programs (especially) and Bachelor degrees, and decline in the importance of research degrees within international education; especially in the second half of the 1990s. Between 1995 and 1998 the number of international research graduates was constant; coursework Masters graduates rose 178.1 per cent (Table 9).

Table 9 International graduates from higher education by level of study, 1995 to 1998

Source: DETYA statistical collections

Table 10 draws out the trend more sharply. In 1988 there were more international research graduates that Masters coursework graduates. In 1999, 3.5 per cent of international graduates took out research degrees, but 25.1 per cent had completed a Masters by coursework.

Table 10 Postgraduate research degrees compared to Masters by course work, international students, 1988 to 1998

Source: DETYA statistical collections

These trends in graduate numbers are still being reproduced also in the pattern of student numbers and student load. Table 11 shows that between 1990 and 1999 research degree student load grew more rapidly among domestic students than among international students; whereas coursework load grew faster among international students. Between 1995 and 1999 alone, international coursework Masters load jumped from 4049 to 14,243. By 1999 about 40 per cent of all coursework Masters students in Business Studies were international.

Table 11 Student load in higher education by level of study, international and domestic students, 1995 to 1998

* includes doctoral courses and research Masters. ** includes postgraduate and undergraduate diplomas, non-award courses, etc. Source: DETYA statistical collections

Table A8 provides more detail on the number of international students by discipline group. It also shows that in Australia over 20 per cent of research enrolments are international in the disciplines of Business, Computing and Mathematics, Earth Sciences, Geography, most fields of Engineering, parts of building and Agriculture, Dentistry and Optometry. International research enrolments in the rest of the sciences, and the humanities and social sciences, are low.

In sum, the international program rests to an increasing extent on a narrow band of general-vocational fields in Business Studies and Computing provided via coursework programs. There has been a shift away from intensive formation in the academic disciplines, including science-based training, in two senses: the areas that have grown most rapidly provide a different kind of higher education, especially Business Studies; and the role of international research degrees has declined. Business courses mostly focus on skill development and specialised applied knowledge, rather than immersion in discipline-based knowledge and the formation of discipline-specific research techniques. These graduates gain a qualification with labour market power, but tend to lose the formative mental effects of core academic study, and the opportunity to acquire academic research techniques with potential value at work.

In recent years the coursework Masters has become a principal means for the commercial expansion of international education in Australia. The Masters offers a level of credential apparently superior to the Bachelors degree, although there is not always a great difference in pedagogies or contents between the two levels. This growth of the coursework Masters has been facilitated by a tendency to shortening of its length. Whereas government-funded places are subject to public regulation which standardises course length, this is not the case with fee-based places. Universities find it relatively easy to respond quickly to demand for vocational courses in Business. The course are cheap to provide, mostly requiring little technological equipment, and often taught by casual staff not themselves engaged in research. And fee revenue has been a strong motive for the expansion in the supply of places.

In 1988 the Australian government restructured higher education as a system of competing universities, managing their own financial affairs while subject to government accountability requirements. It was announced that total student numbers would be lifted by 50 per cent. Smaller institutions were forced to consolidate into larger ones and the sub-university sector, advanced education, was abolished, triggering a round of institutional mergers and site developments. Financing was shifted from 90 per cent public funding, with no tuition charges for domestic students, to a mix of public and private funding. The Higher Education Contribution Scheme (HECS) was introduced for undergraduate places. Student payments under the HECS, fixed at 20 per cent of average course costs, were income contingent, with reayment beginning at an income level of average earnings. Following the earlier deregulation of international student fees, a growing number of postgraduate vocational courses were deregulated, and institutions were no longer penalised financially for private income raising.

The underlying policy objectives were to expand participation rates while providing fiscal relief, to develop the export of international education and so improve the balance of trade, and to strengthen universities-industry relations. The hidden agenda was to reduce the expectations placed on government. Neo-liberal policy imagines universities not as national infrastructure open to a range of public and citizen purposes, but as self-supporting corporations producing private goods for students-as-customers, and nominally regulated by the consumer relationship. After 1988 this conception became increasingly pervasive, both in government and among manager-leaders on campus (Marginson and Considine 2000).

In the same period that these policy changes were being formulated and implemented, public funding per student was falling sharply, particularly funding for basic teaching and research costs such as salaries and library books. The category of expenditure which covers these items is described by the Australian Bureau of Statistics as ‘public final consumption expenditure’ (ABS 1999). This category of expenditure peaked in real terms in 1977-78 and fell thereafter. Domestic enrolments grew more quickly in the second half of the 1980s and the per student value of public final consumption expenditure quickly deteriorated. Between 1985-86 and 1987-88 public final consumption expenditure per unit of student load fell from AUD $10,484 to $9125, and to only $6215 in the first full year of the HECS, 1989-90 (constant 1989-90 prices, Table A3). The new revenues from the HECS filled only about one third of the ‘hole’ in funding that had been created. The decline in public funding for domestic students dramatically reduced universities’ working capital during a period of growth and institution-building, driving them into the market-place to use their newly granted entrepreneurial freedoms. As public funding per student continued to fall – in fact after 1996 total public funding actually declined in absolute terms (Table A10) – the proportion of incomes from fees and charges increased rapidly. At the same time the HECS charge was increased, legitimating further moves away from free education. Between 1990 and 1998 the proportion of funding that came from public sources declined from 70.3 to 51.9 per cent. Incomes from fees and charges, excluding the HECS, rose from 5.9 to 16.0 per cent (Table 12).

Table 12 Income of higher education institutions by source, Australia: 1989 and 1998

HECS = Higher Education Contribution Scheme Source: DETYA statistical collections

This incentive structure, framed deliberately by government policy, powered the rapid growth of international student education as a commercial business. In the early years the government assisted with recruitment, providing embassy facilities in South East Asia. Revenues jumped from AUD $136.7 million in 1990 to $613.0 million in 1998. The proportion of all higher education income from international student fees rose from 2.9 to 8.3 per cent (Table 13).

Table 13 Fees from international students, 1989 to 1998

Source: DETYA statistical collections

More problematically, this incentive structure led also to the leveling off of growth in domestic student numbers and participation rates. As noted, after 1995 the divergence between domestic higher education and international higher education became more marked. This was due to the reductions in public funding announced in the 1996 Commonwealth budget, and the policy-determined ceiling on funded domestic student load. Although institutions received compensation for enrolments about the approved level, this compensation was at a rate of the HECS. Table 14 shows that between 1995 and 1998 revenue from international students increased by 52.9 per cent while international student load rose 73.0 per cent. At the same time income from government and the HECS, the main sources of funding for domestic student places, rose by 5.7 per cent. Not surprisingly, domestic student load increased by only 8.9 per cent. Universities preferred to recruit international students, where numbers were open-ended, each place was fully funded and the universities themselves received all the revenue; rather than recruiting domestic students where planned load was limited and supported on a declining basis, and additional load was funded at less than marginal cost.

Table 14 Growth in higher education student load compared to growth in income, international and domestic students, Australia: 1995 to 1998

income data in 1989-90 prices Source: DETYA statistical collections

In the 1990s and especially after 1995, the growing scarcity of funds for basic teaching and research forced Australian universities to follow any and every avenue to short-term revenues. This determined the rate of increase of international enrolments; the priority given to Business Studies and Computing as the fields capable of generating a rapid increase in short-term revenues; and the lop-sided developmental emphases on the international program and on vocational postgraduate courses rather than undergraduate students or other initiatives. OECD data indicate that between 1990 and 1997, tertiary participation rates rose slower in Australia at 31 per cent, than in the average OECD country at 49 per cent (OECD 2000). The data on Australian university enrolments after 1997 suggest that domestic participation rates plateaued and may have declined, further weakening Australia’s comparative position.

The stated objective of the 1988 reforms was to facilitate private income raising to the level necessary to sustain the total resource position. On the surface, this aim was achieved. Despite the reduction in government funding, total funding of higher education increased in real terms throughout the 1990s, powered by the expansion of HECS and fee revenues (Table A10). It did not return to the levels of the 1970s but it was significantly higher than the low point of the late 1980s. Total private and public funding per unit of student load rose from $12,698 in 1990 to $14,819 in 1995, though it slipped back to $13,983 in 1998 (Table 15). Per student funding from governments and the HECS, as noted the main support for domestic student places, also increased up to 1994, and in 1998 was still only 5.3 per cent below the 1990 level.

Table 15 Income of higher education institutions per unit of student load, compared to staff-student ratio, 1989 to 1998

* units of student load per effective full-time teaching-related staff member (including casual staff) n.a. means data not available. Teaching related staff includes teaching only and teaching/ research staff; excludes research-only staff. source: DETYA, Higher Education data collection

Yet during the 1990s there was a major deterioration in student-staff ratios. The overall ratio was 11.7 in 1983 and 12.8 in 1990. By 1998 it was at 17.4 and rising (Table 15). At the same time the proportion of academic teaching provided by casual staff rose to one fifth. This constituted a major deterioration in conditions for learning. Why did the staffing ratio blow out by 26.3 per cent while total income per student rose by 10.1 per cent? The answer is that trends in total income are misleading and need to be disaggregated and related to patterns of expenditure. In a system undergoing radical commercialisation at the margin, the pattern of expenditure was changing. The new private income, drawn from international education and elsewhere, was applied to different functions to those supported by the old public income. Thus the new private income failed to substitute for that old public income.

Instead of providing core resources for teaching and research, the new private income was largely or wholly absorbed in the costs of generating that income, and the institutional requirements of the now competitive, cash-strapped and and semi-marketised universities: recruitment, servicing and teaching of international students; off-shore operations; marketing and promotions; fund-raising and alumni relations; communications; financial and asset management; performance management; quality assurance and the rest. By 1998, the proportion of university staff who were employed in teaching-related positions was down to 37.7 per cent (DETYA 2001). The decline in learning conditions had implications for international students as well as domestic students. They shared the same classrooms. The staffing ratio deteriorated in all disciplines, including Business Studies. In Business it increased at a rate slightly below average, from 21.7 in 1990, to 26.4 in 1998.

The universities failed to maintain support for core teaching and research activities both because of an absolute lack of finance, and because the incentive structure created by policy propelled scarce expenditure in other directions, especially corporate and commercial development. At the same time, the government had positioned the universities as self-managing corporations responsible for their own economic ‘bottom line’ and their own educational provision (Marginson and Considine 2000). Matters once openly regulated by government policy and public debate, such as the course mix, had been relocated on the terrain of the autonomous university. Thus government defined the questions of the respective roles of Business Studies and other disciplines, and the respective roles of international research degrees and international coursework Masters, as matters for the universities themselves to determine. The reason that Business Studies and Computing came to dominate the international program was solely that these disciplines were more marketable than others. But the curriculum mix has implications for national needs that a market logic fails to encompass. For example, in the longer term, the doctoral education of international research students in Engineering and Science is likely to produce more fruitful meta-national relationships than is the education of coursework Masters students. Likewise, domestic higher education would benefit more from an international program that augmented capacity across the science-based disciplines, that one that stimulates an extended mass teaching capacity in Business Studies.

More generally, the quality of teaching and learning has been made a matter of university responsibility rather than government responsibility. Instead of maintaining actual quality, the government has concentrated on establishing a universal culture of managed quality assurance. The justification for quality assurance lies in the creation of a stronger focus on outcomes and a more reflective culture in general, and its utility in marketing, including international marketing and global regulation (Harman and Meek 1999). Quality assurance managed by academic units themselves – as distinct from quality assurance organised and managed at the institutional level – also has the potential to enhance the evolution of academic disciplines (Mollis and Maginson, forthcoming). However, quality assurance does not measure trends in the resources supporting quality. Institution-managed quality assurance techniques typically produce data ‘demonstrating’ broad-based excellence and continuous improvement, which assists university marketing and strengthens the internal powers of managers while concealing the effects of the change in priorities and the decline of resources for teaching and learning.

If international education had been developed while maintaining a well-funded domestic system, reducing the dominance of short-term revenue raising incentives, the outcomes would have been different. In Australia the dominant long-term trend has been the decline in public investment. In 1997-98 public final consumption per student was at 44.9 per cent of the level of 20 years before, and today the ratio is at about 40 per cent. From the deregulation of international education, the development of commercial activity has been driven by government-determined fiscal scarcity. In this context the creation of a globalised international sector has led to fundamental tensions – tensions between the globalisation of education and the fulfillment of local-national needs; tensions between international education and domestic education; tensions between commercial and non-commercial operations and objectives; and tensions between the private interests of universities, now redefined as self-managing corporations, and public goods. There has been a zero-sum trade-off between resources for teaching and for corporate development; and since 1995, a zero-sum trade-off between the increased participation of domestic undergraduates, and the growth of foreign students. This zero-sum dynamic was deliberate: it was made part of the policy settings.

Thus the remarkable commercial boom in international education in Australia has coincided with and contributed to the impoverishment of the public infrastructure. It recalls Galbraith’s famous dictum about private affluence and public squalor. Whereas the higher education system has become better at producing a limited number of private goods, augmented by credentialism; the capacity of the common infrastructure to meet the broad range of public and private needs has been weakened. In the outcome the globalised and globalising international education sector has grown by consuming part of the conditions that make it possible. In the longer term this is a self-defeating process. The publicly-financed infrastructure is not only at the heart of the education international students receive, affecting their actual conditions of teaching and learning, it underpins the global reputation of Australian education. Australian international education cannot live forever on a reputation accumulated on the basis of past public funding. In the longer run the deterioration of this infrastructure will weaken the competitive position of the international program; unless that deterioration is reversed by a new round of public investment, and the investment is applied to teaching and research.

The pronounced focus on marketable courses in Business and Computing – not in addition to broad-based academic development, and international engagement, but instead of them – is the key to the global character of Australian higher education. The enhanced number of international contact no doubt has positive effects not captured in the price of tuition, such as the building of long-term cross-national business relationships; and the benefits of encounters with diverse cultures. Nevertheless, the concentration on commercial courses has narrowed the range of the potential national and meta-national public goods. At the same time, limiting the bulk of places to a culturally homogenous group with the private capacity to pay has reduced the range of cultural and social ‘others’ that Australian staff and students encounter. The inability to develop large-scale student movement in the opposite direction, from Australia to South East Asia – no doubt such movement has little commercial potential – betrays indifference to the cultural specificities of the countries sending international students to Australia, underlining the homogenising character of Australian global practices.

In terms of geo-politics, Australia’s international education program translates into a global market position built on what Porter (1985) would describe as the high volume production of a standardised product of adequate quality, resting on cost and locational advantages, and supported also by corporate planning and marketing. It is not dissimilar to the British approach. Some British universities enjoy significant reputational advntages, but most are in much the same position as Australia’s universities without Australia’s cost advantages. Australia is soon to follow the British example in creating a national system of quality assurance (Kemp 1999) to support perceptions of quality. Porter’s alternative path is market differentiation via specialised product, or high quality as in the case of the American Ivy league institutions or Oxford/ Cambridge. Australia cannot claim Ivy League prestige, and it has chosen to build generic global degrees rather than to develop national specialisations.

In the outcome Australia is a middle educational power rather a leader, despite the large foreign enrolment. While the international program provides economic revenues, the ultimate beneficiary is not higher education and its clients, but the national government as economic manager which has secured fiscal relief and an better balance of trade. On the other hand the zero-sum dynamic inherent in the international program, by forcing the fork in the road between commercial development and public infrastructure, has weakened national cultural identity and scientific capacity, which rest on a full range of viable disciplines. World educational weight depends not on revenues but on the nation’s contribution to scholarship and research, and perhaps to academic and university organisation. While the Australian international program is homogenising, in South East Asia and Australia, it is not hegemonic.

In developing countries the tension between globalisation and national sovereignty is clear-cut. On the surface the Australian case looks different. In international education, Australia appears to be expressing its national interest via a global role. But a major presence in the global education market does not necessarily lead to a flourishing higher education system, national sovereignty, cultural independence or long-term political-economic potential. The effects of Australian educational globalisation are not only felt in the developing countries of the South East Asian region, they have worked their way back into Australia, simultaneously homogenising and impoverishing its universities. At best, though neo-liberal markets are indifferent to the social and human benefits, international education enables Australians and South East Asians to engage on a mass scale. At worst Australian universities have become agents for a larger Anglo-American hegemony in which Australia as such has no right of self-determination, except by becoming American on American ground. Australian higher education is both agent and victim of economic globalisation. Australia is for the North but it is of the South. Perhaps only a hegemonic power such as the USA, for whom the national is the global, can consistently pursue both neo-liberal globalisation and the national interest.

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Table A1: Public and private expenditure on education, selected OECD countries, 1990 and 1997

Table A2 National investment in tertiary education as a proportion of GDP, public and private sources, Australia and selected OECD and other countries: 1993 and 1997

Table A3 Public (government) investment in higher education in Australia since 1975-76

Table A4 On-shore international students by university, 2000

Table A5 Growth in international graduates from Business Studies, and Engineering, compared to international graduates from all fields of study, 1988 to 1998

Table A6 Students in higher education, distribution by field of study and level of study, domestic and international students, 1999

Table A7 International student load in Business and Law, Computing and Mathematics, Engineering and Science, 1989 to 1999

Table A8 Student load in higher education by detailed discipline group, research higher degree load and total load, international student load as a proportion of all student load, 1999

Table A9 Student load in higher education, by discipline group, proportion of student load in each discipline group that is international, 1989 to 1999

Table A10 Income of higher education institutions by source, Australia: 1989 to 1998

Table A1: Public and private expenditure on education, selected OECD countries, 1990 and 1997

Source: OECD 2000

Table A2 National investment in tertiary education as a proportion of GDP, public and private sources, Australia and selected OECD and other countries: 1993 and 1997

Source: OECD 2000

Table A3 Public (government) investment in higher education in Australia since 1975-76

Notes: all money figures are in constant 1989-90 prices, i.e. the effects of inflation on price levels have been eliminated and the table illustrates ‘real’ changes. Government final consumption expenditure is the main source of financing for teaching and learning in HECS-based courses (i.e. courses in which a market fee is not charged, covering four fifths of all students), including academic salaries and library resources.

Table A4 On-shore international students by university, 2000 *

* preliminary data and subject to revision. ** 1999 data # private institution receiving public funding (the unfunded private Bond University, which enrols about 2000 students, is not included). Source: DETYA statistical collections

Table A5 Growth in international graduates from Business Studies, and Engineering, compared to international graduates from all fields of study, 1988 to 1998

* includes Management, Administration and Economics Source: DETYA statistical collections

Table A6 Students in higher education, distribution by field of study and level of study, domestic and international students, 1999

because of combined courses, components of each column do not always equal the total. Source: DETYA statistical collections

Table A7 International student load in Business and Law, Computing and Mathematics, Engineering and Science, 1989 to 1999