Hon. Trevor Mallard
29 August, 2003 Speech Notes

India a growing market for export education

Speech to India New Zealand Business Council Meeting, Auckland.

New Zealand’s trade relationship with India is wide and crosses a variety of sectors.

I do not need to reiterate to your group the importance of New Zealand’s trade with India but it is good to note that in recent years the value of trade both ways has been growing steadily.

The most recent figures for the last 12 months are almost in balance, with each country exporting to the other around NZ$185 million.

The composition of our exports to India is also changing, offering potential for longer term growth.

The mainstay of New Zealand exports to India continues to be wool ($56 million last year) but its relative importance is declining (i.e. last year wool represented 29 per cent of total exports, down from 37 per cent in 2000).

There is major growth potential in the forestry sector and the Indian construction sector is likely to be the cornerstone of opportunities for New Zealand companies in India in the next five years.

Niche markets are also opening up for New Zealand manufacturers, with electronic transformers, sorting machinery, and transmission apparatus now among New Zealand's top 20 exports to India.

Although more difficult to quantify, the growth in Indian interest in New Zealand as a film destination could also be of increasing significance in the future. Some 120 films have been shot in New Zealand over the past three years.

This is an industry that can also positively impact on both the tourism and education services that we deliver to India.

Tourism numbers continue to show strong growth, up 37 per cent last year from 12,600 in 2001 to 17,270 last year.

This is valued in monetary terms at an estimated $70 million a year. India is a promising emerging market for tourism and Tourism New Zealand has seized on this potential by opening an office in Mumbai in March.

Export education is worth even more.

The monetary value to New Zealand of education exports to India is now estimated at about $80 million a year. That includes not only the tuition fees paid here by Indian students, but also the money spent by the students on living expenses or recreation.

As you may be aware, export education is worth $1.7 billion a year to the New Zealand economy and 80 per cent of our international students come from the Asian markets of China, Korea and Japan.

To balance the risk of being so heavily dependent on three countries, we are keen for the export education industry to diversify and tap into other markets.

It’s the potential of the Indian market for New Zealand’s export education that I really want to focus on today.

Before I do, I want to acknowledge the role of the India New Zealand Business Council in helping get the India Education Export Network to where it is today.

After it was set up in 1998, the network got busy marketing New Zealand education in India, in the shape of education fairs and seminars, and working closely with what is now known as New Zealand Trade and Enterprise and the Immigration Service.

Since then, we have seen numbers of tertiary students from India choosing to study here growing from just 163 students in 1998, to 3135 at 30 June this year.

India is an important market for local tertiary providers – and one that should keep growing.

In fact, India and China are expected to be the two key markets globally for countries providing education services to international students.

Achieving continued growth at this level is no small feat.

India has a well-educated middle and professional class that understands British and American tertiary education.

We know the Indian international student market is fiercely competitive.

The market, therefore, is ripe for our own tertiary providers.

However there are risks that need to be balanced and carefully managed.

India is a high cost country to market in and we need to make sure that students are coming here for genuine study reasons.

It is also important that the recruitment agents representing New Zealand in India are chosen carefully.

By managing these risks while maximising the opportunities, the network has done a great job.

The network, although it’s made up of competitors for tertiary international students, has adopted an approach that truly could be called collaborative.

In 2000 the network was a group of 10 tertiary institutions.

Now it has grown to 23 with all the universities and larger institutes of technology and polytechnics represented.

There are also a handful of private institutions in the network, offering diplomas and degrees and niche courses.

The network has come up with an innovative, yet cost effective way to get around the problem of agents who might be shonky operators.

It is now ensuring that those representing New Zealand as agents are giving good advice to potential students and that they are selecting genuine students who are most likely to do well here.

The network did not want to make the same mistakes as Australia where there were too many non-attending students of questionable academic ability.

It helped establish a system of ‘approved advisors’ where numbers have been kept small and elite.

Agents who wish to be accredited as an ‘approved advisor’ must apply to the network and go through a robust system of assessment and vetting.

Today New Zealand Trade and Enterprise staff in India approve agents who meet the required standard, on behalf of the network.

New Zealand Immigration Service staff in India, along with the network institutions, then train these agents.

This system has been established with the co-operation of New Zealand Trade and Enterprise, the Ministry of Foreign Affairs, New Zealand Tourism, the New Zealand Immigration Service and of course the network itself - in a true NZ Inc. spirit.

I believe the network can consider itself an example of good practice in our export education industry.

In fact, since its establishment, other marketing networks – for example, the Middle East Education Export Network, have been established and have followed the India network’s example.

New Zealand institutions have traditionally relied only on recruiting students to study in New Zealand.

There is a need to add value to what New Zealand can provide, rather than rely only on student recruitment.

With increased competition in the market and inevitable changes set to occur in India over the next two years, New Zealand institutions need to look at differentiating themselves from others and offering unique benefits and services which ONLY New Zealand can offer.

One of the innovative ways to do this is to move laterally by establishing arrangements between industry and education.

One example that is already operating is the India /NZ Food Technology Network / Cluster that works with industry in New Zealand and India, in collaboration with New Zealand tertiary education providers.

This work also covers dairy and horticulture, two areas of much relevance to India and areas where New Zealand is known for its expertise and capability.

A similar approach can be replicated for areas of critical interest to New Zealand such as biotechnology and electronics.

New Zealand’s education relationship with India is still relatively new but it does hold promise.

More needs to be done to develop institutional linkages and staff and student exchanges between our two countries.

But I think we should be very pleased with developments to date.

ENDS

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