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Part Two: Delivery of Core Business

This section reviews how well the agency delivers value to customers and New Zealanders and how well it demonstrates increased value over time. While the questions guide the Lead Reviewers to retrospective and current performance, the final judgements and ratings are necessarily informed by scope and scale of the performance challenge.

Core business 1: Promote New Zealand as an education destination
Performance Rating (Value to Customers and New Zealanders): Well placed  well placed - big.

 

Performance Rating (Increased Value Over Time): Needing development need development - big.

This core business area aligns with Goal 1 of the Leadership Statement for International Education: New Zealand’s education services delivered in New Zealand are highly sought after by international students. Education NZ has performed well in this area since its establishment in 2011. Education NZ took over from its predecessor organisations which were not seen as effective and has seen student numbers grow to 110,281 in 2014, the highest level for a decade. The markets for competitor countries have also grown in this time but commentators consider Education NZ has improved the marketing of New Zealand as an education destination and this has been an important element of New Zealand’s growth.

Industry is supportive of the role of Education NZ in the promotion of New Zealand as an education destination. Education NZ’s role has three components: marketing, including operating www.studyinnewzealand.com and www.enz.govt.nz; overseas representation including in-market presence and trade fairs; and business development including working with education providers to support them to go to market. Education NZ’s public documents give more detail on its activities in this area and achievements.

There are some significant risks to the continued growth in the numbers of international students studying in New Zealand. They include a concentration in the number of students from China and India and possible disruption in those markets; the impact of further intensification from those markets on New Zealand education providers; a likely slowdown in the number of students from India studying low level qualifications resulting from tightening of immigration and NZQA entry criteria; constraints both real and self-imposed in the capacity and appetite of New Zealand institutions for greater numbers of international students; perceived constraints in the popular Auckland destination being balanced with other regional destinations being promoted; availability of supporting infrastructure to accommodate more students, particularly in the school system (eg, homestays); more competitor countries entering the market; new and improved product offerings from existing competitor countries; and disruption from new modes of learning including digital delivery.

At the same time there are considerable opportunities for further growth. It is important that these are explored both for their own sake and as possible mitigations for the risks noted. Some opportunities are:

  • Increased value – work with the university and institutes of technology/polytechnics sectors to focus on higher value qualifications in key markets
  • Increased volume – working with provider partners to remove barriers to continued growth in international student numbers while maintaining education quality outcomes for both domestic and international students
  • Increase market segmentation/targeting, aligning education offerings with particular opportunities based on well-developed market insights and intelligence (both student customer and government goals)
  • Develop clear, transparent and easily accessed pathways that support high value students to pathway through the New Zealand system and where appropriate into employment and residency
  • Develop courses and programmes that respond to international student needs and requirements and that New Zealand is well positioned to provide
  • Work with international providers who wish to establish a footprint in New Zealand and where there are opportunities either to provide greater access to offshore markets or opportunity to leverage existing education reputation
  • Create a more seamless ‘landing’ for students through coordination of pre-qualification for visa and entry criteria, giving students greater confidence regarding their ability to study in New Zealand
  • In markets where there are concerns about student quality, develop agent programmes or other channels to actively manage risk
  • Work with the New Zealand Qualifications Authority, the Ministry of Education and the Tertiary Education Commission to ensure all international education providers working in the international education sector are providing appropriate quality education services and experiences.

Education NZ is aware of these opportunities but to date has not either prioritised or felt it had the mandate to pursue them actively. Across government support is also required. As noted elsewhere in this report, Education NZ is working at the interface of the education and economic agendas and an understanding across government of the priorities and trade-offs is vital to Education NZ making progress. The review concludes that as the only government agency focused exclusively on international education, Education NZ must progress the thinking for New Zealand on this critical service sector.

The ratings for this core business area reflect Education NZ’s good performance to date in promoting New Zealand as a student destination and the value to customers and New Zealanders that goes with it. The rating for ‘Increased Value Over Time’ reflects the need to explore the opportunities to better understand and target customer needs to further grow the size and value of the market and mitigate the considerable risks faced.

Core business 2: Ensure New Zealand’s education programmes, products and services delivered offshore are sought after
Performance Rating (Value to Customers and New Zealanders): Needing development need development - big.

 

Performance Rating (Increased Value Over Time): Weak weak - big.

This core business area aligns with Goal 2 of the Leadership Statement for International Education: New Zealand’s education services in other countries are highly sought after by students, education providers, businesses and governments overseas. Education NZ understands the potential importance of this goal to diversify from a heavy dependence on student attraction with its risks, constraints and historically cyclical nature.

However Education NZ knows it has not prioritised progress for this goal particularly strongly during its establishment phase, rather focusing on the larger economic target and opportunity associated with Goal 1. This is understandable during the establishment phase, however Education NZ recognises it must now start to spread its focus to include Goals 2 and 3 in its strategy and operations.

To date it has taken a largely reactive role with providers looking for support or assistance rather than a more active ‘market maker’ role. New Zealand education providers have limited experience and success in trans-national education delivery with the exception of some education publishing and edtech companies, and a small number of institutions that have the scale and incentives to develop this market. There is limited understanding of what makes New Zealand delivery offshore attractive to customers and this must be the basis of further progress on this goal.

The business case and methodology for the measurement of benefits for Goal 2 are not clear, with onshore students delivering a greater economic return and the margins on offshore education said to be small. But the $0.5 billion target is not large and the potential markets and growth are much larger than for onshore education. Other countries (in particular the United Kingdom, Canada and Australia) have developed significant markets through trans-national delivery and in doing so created spillover benefits in the form of raising awareness of their in-country education offerings, often using their in-market provision to staircase learners into other programmes or courses in their home domain.

While Education NZ is aware that it needs to plan and progress this goal over the coming period it has not yet developed clarity regarding its approach or value proposition. Given other countries are significantly more advanced than New Zealand in this area, Education NZ should understand the learnings and mistakes made by others to help fast track successful outcomes. Education NZ needs to understand and help providers to understand customer needs and New Zealand’s value proposition. Education NZ then needs to access commercial and international capability to develop a clear strategy based on its value proposition including how it is going to stimulate provider interest and appetite to deliver trans-national education services, including whether it plays a role in identifying and bringing opportunities to the New Zealand market to meet demand.

A key factor in making delivery offshore an attractive proposition for providers will be Education NZ’s ability to work with sector central government agencies, particularly the New Zealand Qualifications Authority to increase the ease with which providers can offer New Zealand qualifications offshore and New Zealand Trade and Enterprise to provide support to providers going offshore for the first time. If it is to stimulate interest and growth in the Goal 2 area, Education NZ has to be an active player in identifying, developing and packaging opportunities for the New Zealand education providers to respond to. This is a very different role to that which it currently plays and one that it doesn’t currently have the capability to deliver.

Core business 3: Foster wider economic connections between New Zealand and overseas through New Zealand’s international education expertise
Performance Rating (Value to Customers and New Zealanders): Needing development need development - big.

 

Performance Rating (Increased Value Over Time): Weak weak - big.

This core business area aligns with Goal 3 of the Leadership Statement for International Education: New Zealand makes the best possible use of its international education expertise to build skills in our workforce, to grow research capability and to foster wider economic connections between New Zealand and overseas firms. The Leadership Statement for International Education targets for this goal are to increase postgraduate students in New Zealand from 10,000 to 20,000, increase the transition rate from study to residence for degree level international students and increase New Zealanders’ skills and knowledge to operate across cultures. International postgraduate student numbers have increased from 10,275 in 2011 to 14,327 in 2014.

To date Education NZ’s major activity in this area of core business has been the establishment and administration of scholarship programmes including the establishment of the Prime Minister’s Scholarships for Asia. Education NZ’s scholarship work, whilst important, is relatively modest compared to the total scholarships offered by New Zealand. In 2015 Education NZ will administer approximately $3 million in both inbound and outbound scholarships. Recent work by Education NZ indicates that across all New Zealand government agencies there are approximately $160 million of scholarships granted each year with Ministry of Foreign Affairs administering by far the largest in value. Given the relative size of Education NZ’s programme it may be worth considering whether there is potential to realise efficiencies by working more closely with other NZ Inc agencies in this area.

The most significant opportunity in this area is to increase focus and align policy settings to support the attraction and retention of high-value and skilled students who wish to both study work and live in New Zealand.

Education NZ needs to work with the sector central government agencies to develop a framework that describes the study/work pathways New Zealand wishes to offer to international students and then align the policy settings to help students and their families choose New Zealand as a destination. This requires Education NZ to be able to influence other agencies to identify migration workforce needs in New Zealand’s sectors and industries and work with Immigration NZ to develop visa and migration packages that support the desired outcomes.

Another important activity that falls within this goal is progressing Education NZ’s thinking regarding its alumni programme. Education NZ has not placed much emphasis on this aspect of its role to date and acknowledges it is a critical focus for the future. Education NZ needs to clearly identify the benefits of maintaining connection with international students who have received a New Zealand qualification/education and implement a strategy that supports the realisation of those benefits across multiple settings and channels.

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