Education is a powerful determinant of social and economic development. It is critical to innovation, and innovation is a key means by which business improves productivity. APEC economies invest heavily in education, with education accounting for about 7 per cent of GDP across member economies. Nevertheless, in all APEC economies there is concern that education institutions are failing to keep pace with changing social and economic needs, particularly in adequately preparing the workforce. It is widely believed that the successful internationalisation of education systems has emerged as a powerful tool in responding to this growing challenge.

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Internationalisation of education systems is hinged on two key principles – openness and alignment.

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Recognising the current and future workforce needs is a well-documented challenge and therefore won’t be covered exhaustively in this paper. However, as global technological transformations continue to scale, there is ever-more need to ensure that education systems in each economy are responsive and representative of both local needs and global innovations. Education systems and the offerings they provide must be aligned to international standards, which in turn; will enhance the quality of learning and the competitiveness of economies.

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In addition to being aligned to international standards and innovation strategies, the successful internationalisation of education systems is dependent on their degree of openness and accessibility.  Reducing obstacles to cross-border trade and investment in education enables host economies to draw upon much larger pools of capital, talent and creativity than would otherwise be available.

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Increasing the mobility of students, academic programs, curricula and education providers will further contribute to a system’s degree of openness and therefore increase overall competitiveness.

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Education in the APEC Services Competitiveness Roadmap

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Increasing the competitiveness of education services fits squarely within the strategic priorities of APEC. In 2016 APEC leaders endorsed the Services Competitiveness Roadmap, with targets to be achieved by 2025. Specially, the Roadmap calls for:

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• Ensuring an open and predictable environment for access to services markets by progressively reducing restrictions to services trade and investment;

• Increasing the share (%) of services exports from APEC economies in the total world services exports so that it exceeds the current share in world service exports by 2025;

• Increasing trade in services in the APEC region so that, by 2025, the compound average annual growth rate exceeds the historic average of 6.8 percent and the share (%) of the services sector in the total GDP of the APEC region exceeds the global average level by 2025.

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The education sector is one of the sectors specifically singled out for APEC-wide action.

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Below we provide specific recommendations about how to implement the APEC Services Competitiveness Roadmap in the education sector specifically outlining the kinds of reforms economies ought to prioritise.

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Paralleling the drive to promote the competitiveness of services in member economies has been the drive to develop an APEC Education Strategy, endorsed by APEC Education Ministers and formally noted in the 2016 APEC Leaders’ Declaration. The Education Strategy envisions that by 2030 the APEC region will have a strong and cohesive education community characterised by inclusive and quality education supporting economic growth, integration and so wellbeing.

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These two major APEC policy initiatives are reinforcing of each other and have an intersecting emphasis on the importance of the education sector in supporting economic and social advancement.

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Greater Openness to Cross-Border Education: Facilitating Mobility through streamlined services

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We applaud the APEC Services Competitiveness Roadmap’s call for: “Supporting cooperation in the education sector including promoting internship schemes, overseas student exchange programs, and collaborative policy studies” along with the 2010 APEC Leaders’ Declaration which committed to coordinated efforts to “enhance the mobility of students, researchers, and education providers within APEC through the development of higher education cooperation”. This declaration by Leaders also committed to enhancing the mobility of students, the mobility of researchers, the mobility of education providers and the existing network of bilateral agreements.

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These commitments highlight a tremendous foresight and focus by APEC; however, implementation has (understandably) lagged in many economies, seriously hampering those economies ability to compete internationally.

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One notable area of success has been in the mobility of students undertaking degrees abroad, which has increased significantly, and at a faster pace in APEC than in the rest of the world. The number of international students undertaking degrees in APEC economies grew from 1.80 million in 2012 to 2.47 million in 2017. This represents an increase of 37% whereas the rate of growth in the rest of the world was just 16% during the same period (UNESCO data for available economies, closest year available). In addition, more students who study in their home economy able to undertake a learning abroad experience, such as a semester abroad, study tour or work placement, although comparable data is not available. The increase in mobility of students in APEC has been welcomed by ABAC, since it facilitates graduates who are better able to engage in international and intercultural contexts preparing them for changing work environments.

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However, a critical impediment to continued growth in mobility is the continued existence of complicated and time-consuming visa processes. This is especially the case for those students undertaking work placements abroad, a form of mobility that provides great benefits for not only the students themselves, but also their host organisations, host economies and future employers.

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• Recommendation: Visa processes for students, researchers and educational service providers be streamlined and simplified.

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Regulatory obstacles remain high to increased movement of education providers across borders to establish commercial operations in another APEC economies (ACER 2014). Not only must branch campuses (mode 3) satisfy the often-higher education standards and quality controls in its home jurisdiction, it must also confront a range of FDI-type controls on equity share, workforce and migration restrictions and profit-repatriation controls, as well as compulsory curriculum and teaching material restrictions. The traditional reservations of policy-makers are breaking down as the achievements of early movers have become clear. For instance, China, Chile, Malaysia, Singapore and Vietnam have all had striking success with invited branch campuses and other forms of partnered in-country program delivery from universities based in other jurisdictions. In all cases, this has supplemented and enriched the range of options available to students locally, while also producing wider spill-over benefits for business (e.g. industry research partnerships) and society as a whole.

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• Recommendation: Ensure that regulatory, accreditation and quality assurance frameworks support the expansion of quality programs by providing a transparent and predictable environment for innovation by existing providers and entry by new providers (both local and international).

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Promote the rapid adoption of innovation in education and training

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The APEC Services Competitiveness Roadmap calls for “Collaboration in responding to the rapid developments in internet-based technology to promote a regulatory approach that provides appropriate prudential oversight, legitimate consumer and security protections while enabling the flow of trade-related data in the context of an increasingly digitalized world”.

ABAC has long urged APEC policy makers to consider the rapid rate of change within regional labour markets and the growing demands of employers. Creating a strong balance between innovation agendas and educational-system responsiveness to labour market needs must be prioritised to ensure there is minimal skills mismatch, which is a common grievance amongst employers within the APEC region. Further, as labour markets continue to change and develop, the appetite for lifelong learning and the need for upskilling continues to grow - thus providing a significant opportunity for education service providers preparing people for future jobs.

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Education markets across the APEC region are undergoing rapid change. There is tremendous commercial opportunity in EdTech and innovative cross-border education delivery more broadly. Rising education participation rates and the imperatives of “life-long learning” mean that even in APEC economies with mature demographic profiles, the growth potential is high.

This is particularly so at the tertiary (both higher and vocational) and adult education levels, and in modes 1 and 3 of cross-border education delivery. As the experience of the jurisdictions that have started moving earlier than others demonstrate, this creates new commercial opportunities, better-equipped workforces, more equitable and inclusive economic outcomes and stronger overall developmental trajectories.

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Online education delivery is also expanding rapidly, in the delivery of formal award/degree programs and, in particular, non-award adult education training programs. This is despite the wariness of regulators in many APEC economies, partly for reasons of quality assurance, to recognise or facilitate fully online delivery of programs across borders. In this, regulators are at risk of being overtaken by reality.

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Just as Massive Open Online Courses (MOOCs) have operated largely beyond the control and without the support of regulators, it is increasingly likely that the more challenging format of Small Private Online Courses (SPOCs) delivering delimited, formal award programs on a sustainable for-profit basis will — driven by international market forces — take hold and simply by-pass national regulators. For a time sceptics could declare with confidence that factors such as a traditional bias in favour of face-to-face, on campus education and, at least in some jurisdictions, limitations on digital infrastructure would limit the spread of online education. But as the now widespread pattern of millennial preferences for all things digital (reflected in empty-lecture halls on campus) and the practical reality of severe logistical and cost obstacles to attaining on-campus education (particularly in heavily congested cities) exert their inexorable influence, online delivery is almost certain to expand further quickly.

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Private investors (and some public education institutions) have recognised this, and are moving accordingly. This is happening across the higher education, the vocational education and the adult education market segments. It ranges from high profile ventures such as US-based LinkedIn’s Lynda.com, through Indonesia’s EdTech start-up HarukaEdu, to Australia-based online pioneering private education provider, Navitas. Particularly in the industry-oriented and skills-based adult education market, the pace of growth is likely to be particularly rapid. Singapore’s ambitious workforce planning agency, SkillsFuture, is moving faster than many other national agencies in tapping into this potential.

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There is great commercial potential in EdTech. Precisely because the education services sector as whole has long been relatively non-competitive, it is widely seen as ripe for disruption. To begin with, this was mostly about using digital technology to shake up the delivery of education, but it is now moving much more deeply, ranging from the potential of Virtual Reality/Augmented Reality to the application of machine learning and analytics to the education sector. With the APEC region accounting for such a large and still growing share of the global education market, there is great scope for entrepreneurship.

Regulatory environments need to be updated to keep pace with the forces of technological change and educational demand and supply. It should aim to encourage not stifle innovation.  Regulatory barriers to online delivery include costly requirements for a local presence, controls on data privacy and cross-border information flows, multi-jurisdictional quality assurance requirements and award-recognition issues.

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• Recommendation: Remove restrictions on cross-border online provision of education, whether in the form of accredited online degrees, short courses, micro-credentials or testing service, and ensure that quality and accreditation standards are transparent and non-discriminatory

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Improve responsiveness of education systems to economic and social needs through harmonization and internationalisation of education

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In order to support the competitiveness of economies, education and training systems need to be dynamic in adopting new knowledge and skills in each field and responsive to needs of business and society more broadly. Education and training systems that are responsive to change allow individuals and organisations to harness the opportunities arising from the global spread of technological innovation and scientific research, the expansion of foreign investment and trade in good and services, and growth in professional mobility. Internationalisation of education and training stimulates global linkages between individuals and organisations, advanced human capital development and technology transfer, resulting in broad-based benefits for the society as a whole.

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Too often, however, we see governments imposing rigid controls over institutional accreditation curriculum and teaching methods that hamper innovation and see our young people graduate with already archaic knowledge and redundant skills. National systems of professional education and accreditation that are poorly aligned with international standards limit the ability of professionals and businesses to work internationally.

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ABAC has urged APEC economies to continue to work to align domestic regulation of services with global best practice; to work towards greater regional regulatory coherence (including through enhanced international regulatory cooperation); to design regulatory institutions in a way that promotes trade-friendly regulation, and to strengthen public-private cooperation in the development of regulatory settings for services.

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ABAC has welcomed the Roadmap’s call for “qualifications and credit systems and measures to explore mutual recognition” … “in accordance with domestic education systems information sharing pertinent to economies’ education standards”. Further, we call on APEC economies to pursue greater harmonisation of education system design, qualification standards and regulatory processes to broaden international engagement by education providers and mobility of students and graduates.

 

Recommendation: Ensure that as governments review regulation of education and training systems they take steps to foster greater harmonisation across APEC, promoting the alignment of educational standards with international practice and facilitating the flow of knowledge, skills and people across the region.

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Similarly, ABAC has noted the APEC Services Competitiveness Roadmap’s calls for “Supporting cross-border mobility for professionals, building on initiatives such as the APEC Architects and Engineers Registers to facilitate mutual recognition arrangements.” We note that a serious impediment to professional mobility is the persistence of national professional licensing processes that are inward-looking and inconsistent with international standards, sometimes due to cumbersome regulatory structures and sometimes due to a desire to shelter professions from international competition. Bodies that have been granted the right to regulate professional qualifications have an obligation to ensure that their standards serve the needs of business and community, and this is best done by demonstrating a close alignment with international best practice in each field.

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Recommendation: Governments should ensure that agencies responsible for accreditation of professional education programs and the licensing of professionals align their standards with international professional practice.

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ABAC has long held the view that there is an inextricable link between education services, skills training and regional economic development and prosperity.

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Recognising that priorities of the APEC Services Competitiveness Roadmap and the APEC Education Strategy and the ambitious timetable laid out in them, the most promising areas of focus must be on increasing mobility of students and education service providers, ensuring regulatory, accreditation and quality assurance frameworks support the expansion of quality programs and reducing restrictions on cross-border online provision of education.

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Further, it is of paramount importance that APEC governments take proactive steps to foster greater harmonisation across APEC, promoting the alignment of educational standards with international practice and facilitating the flow of knowledge, skills and people across the region.