panel sponsored by - milken institute · 2014. 8. 20. · asian higher education landscape access...

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Non-High School

16%

Some College17%

Associate8%

Bachelor +26%

High School33%

Supply: Highest Level of Education(25 years and older)

Total personsage 25 and over:177.0 million

17% Bachelor only

Education and Training Pays…

Master’s degree

Bachelor’s degree

Associate degree

Some college, no degree

High school graduate

Some high school, no

diploma

Unemployment rate in 2000

(Percent)

Median earnings in 2000

(Dollars)

1.6

1.8

2.3

2.9

3.5

6.5

55,300

46,300

35,400

32,400

28,800

21,400

200019951990198519801975

60

50

40

30

20

10

0

US$ Thousands

No High School DegreeHigh School GraduateBachelor's Degree

Education PaysWage Disparity by Educational Attainment

Asian Higher Education LandscapePercent of Workforce with Secondary Education or Better

Untapped Potential: Growing Pool of Postsecondary Students…

TaiwanHong Kong

South KoreaChina

JapanThailand

100

80

60

40

20

0

Year 2000Year 2020

Asian Higher Education LandscapeAccess to Higher Education (18-22 Year Old Students)

� In Malaysia, for example, an additional 5.4 million higher education slots are needed to get to 40%

� Online courses will capture at least half of this growth - $200+ billion opportunity by 2020

8.340%14%Malaysia

240.020%3%China

# of Students (mm)% of Students

16.145%42%U.S.

0.120%15%Hong Kong

11.08%4%India

Projected by 2020Current %

Global Demographic Changes Mirror the U.S.:Aging Populations, Increased Postsecondary Attendance, and Need for Skilled Labor

� Skilled white collar segment growing in excess of 2% per year in most Asian countries

� In the next 20 years there will be 36 million additional skilled white collar workers

Asia Is Changing

103 million81 millionSkilled white collar jobs

141 million93 millionPostsecondary graduates

40%31%Over age 40

Projected by 2020Current

The India OpportunityProjected High School and Higher Education Enrollment

• By 2010, higher education enrollment is projected to increase to 11.7 million from 2.1 million in 2000, with public universities restricted to a privileged few? 700,000 MBAs in demand, yet only 4,000 granted per year

? 30% of students attend private universities

20102000

20

15

10

5

0

Millions

SecondaryHigher

The Mexico OpportunityExpected Enrollment

• Over the next decade, Mexican high school and undergraduate program enrollments are expected to grow three times faster thanin the United States

• Led by the continued demand for higher paid, skilled workers, the supply of educational services has been outpaced by demand for those services

0.0

1.0

2.0

3.0

4.0

5.0

1996A 2000A 2005E 2010E

High School Undergraduate

Mexico

2.2

1.4

2.61.9

3.32.6

4.03.4

Mill

ions

12

13

14

15

16

17

18

1996A 2000A 2005E 2010E

High School Undergraduate

United States

14.114.4

14.9 15.1

15.9 16.115.5

17.5

Mill

ions

93

9

80514537261917

5 96 8

93 105127

5845

4733

2672 2778

3456

2063

12761014

757472453295145105

4033

6464

Q3 99

Q4 Q1 00

Q2 Q3 Q4 Q1 01

Q2 Q3 Q4 Q1 02

Q2 Q3 Q4 Q103

Q2

CampusesCoursesRegistrations

Online Learning Growth

Fiscal years

32% Compound Growth Rate

An Investment in Knowledge Pays the Best Return

Wealth Today Resides in Human Capital• Becker and others

estimate that roughly 70% of a nation’s wealth today is in the form of human capital rather than physical capital.

• The pecuniary returns to knowledge, education and skill are very high in the United States and even higher outside the most developed countries.

Investment in Human Capital as a Percent of GDP

17 – 25+Percent

9 - 11%

4 – 6%

4 – 8%

???

Schooling

On the Job Training

Health

Adult Education

More Use Internet For EntertainmentAs Percent of Internet Users Using the Internet

*People were allowed to select multiple activities (Based on Household Survey)

By Age GroupOnline

CoursesPlayingGames

10 to 14 0.7 63.015 to 19 2.1 58.220 to 24 5.5 47.325 to 29 5.5 38.630 to 39 4.6 34.940 to 49 4.2 30.650 to 59 3.6 26.560 to 69 1.9 28.6Total 3.4 40.9

Scientific Literacy of 15 Year OldsPerformance of 15 Year Olds on the PISA Literacy Scale

MexicoItaly

SpainGermany

U.S.U.K.

CanadaAustralia

KoreaJapan

560

540

520

500

480

460

440

420

400

Scale

Mean Score = 502

Mathematical Literacy of 15 Year OldsPerformance of 15 Year Olds on the PISA Literacy Scale

MexicoItaly

SpainGermany

U.S.U.K.

CanadaAustralia

KoreaJapan

600

550

500

450

400

350

Scale

Mean Score = 498

Vocational SchoolingNumber of Non-Degree Granting Institutions Offering

Post-Secondary Education

By Control '98-'99 '99-'00 '00-'01 '01-'02Public NA 501 532 501Private NA 4,664 4,544 4,558Total 5,437 5,165 5,076 5,059

Top 10 Fastest Growing IndustriesNumbers in Thousands of Jobs, 2002-2012

Industry Number PercentSoftware Publishers 173.7 67.9Management, Scientific, & Technical Consulting Services 405.6 55.4Community Care Facilities 382.3 55.0Computer Systems Design & Related Systems 635.0 54.6Employment Services 1763.5 54.3Individual and Vocational Rehabilitation Services 597.3 47.1Ambulatory Health Care Services 669.8 46.4Water, Sewage , and Other Systems 22.5 46.4Internet Services, Data Processing, and Other Info. Services 244.3 46.2Child Day Care Services 316.1 43.1

Change

Top 10 Fastest Growing OccupationsNumbers in Thousands of Jobs, 2002-2012

Occupations Number PercentMedical Assistants 215 59Network Systems and Data Communications Analysts 106 57Physician Assistants 31 49Social and Human Services Assistants 149 49Home Health Aides 279 48Medical Records and Health Information Technicians 69 47Physician Therapist Aides 17 46Computer Software Engineers, Applications 179 46Computer Software Engineers, Systems Software 128 45Physical Therapist Assistants 22 45

Change

Number of U.S. Jobs Moving OffshoreIn Thousands, By Job Category

Job Category 2000 2005 2010 2015Office 54.0 295.0 791.0 1659.3Computer 27.2 109.0 277.0 472.6Business 10.8 61.3 161.7 348.0Management 0.0 37.5 117.8 288.3Sales 4.6 29.1 97.3 226.6Architecture 3.5 32.3 83.2 184.3Legal 1.8 14.2 34.7 74.6Life Sciences 0.0 3.7 14.5 36.8Art, Design 0.8 5.6 13.8 29.6Total 102.7 587.6 1591.1 3320.2

IT - Most Active Area of Outsourcing2004

IT,28%

Human Resources,

16%

Sales & Marketing,

15%

Finance,11%

Admin.,9%

All Others,21%

U.S. Corporate Training Topics

IT Training, 33%

Other, 67%

Training and EducationAs Percent of Total GNP

Other, 90%

Corporate Market, 0.76%

Continuing Education,

0.14%

Training & Education,

9%

Tech-Driven Lecture/Lab

30

25

20

15

10

5

0

Hours

Training HoursLecture/Lab Driven vs. Technology-Delivered

28

11.2

E-LearningAs % of Total Private Investments in Education Industry

20001999199819971996

100

80

60

40

20

0

Percent

Exponential Growth in the Corporate Online Learning Market

200320022001200019991998

12

10

8

6

4

2

0

US$ Billions

“The next big killer application for the Internet is going to be education. Education over the Internet is going to be so big it is going to make e-mail look like a rounding error.”

John Chambers-Cisco Systems

The Global Education Market

DemographicsHigher Education

MarketOutsourcing

Branding

Cons

olida

tion

InternetGlobalization

Six Megatrends Shaping the Global Higher Education Market

An Investment in Knowledge Pays the An Investment in Knowledge Pays the Best Return Best Return

An Investment in Knowledge Pays the Best Return

Wealth Today Resides in Human Capital

§ Becker and others estimate that roughly 70% of a nation’s wealth today is in the form of human capital rather than physical capital.

§ The pecuniary returns to knowledge, education and skill are very high in the United States and even higher outside the most developed countries.

Growth Depends on Recruiting and Retaining a Skilled Group of Knowledge Workers

The Costs of Recruitment Are Staggering

Retention Is Critical: Hiring Costs Are Sunk Costs

Knowledge Worker “Age-Wage” Gradients Are Steep

Investment in Human Capital as a Percent of GDP

17 – 25+Percent

9 - 11%

4 – 6%

4 – 8%

???

Schooling

On the Job Training

Health

Adult Education

0%

5%

10%

15%

1936 1946 1956 1966 1976 1986 199660%

65%

70%

75%

Raw Labor

Human Capital

Raw Labor and Human Capital as a Percentage of National Income

Raw Labor Human Capital

Post-Secondary Education Premiums 1967-1997

College Entry in the United States

Percentage of High School Graduates That Continue To College

100

110

120

130

140

150

160

170

180

190

Australia Canada France Germany Sweden Switzerland UnitedKingdom

United States

Non-university tertiary education

University-level education

Earnings of Tertiary Education as a Percent of Earnings of Upper Secondary Education

Men

100

110

120

130

140

150

160

170

180

190

Australia Canada France Germany Sweden Switzerland UnitedKingdom

United States

Non-university tertiary education

University-level education

Women

Earnings of Tertiary Education as a Percent of Earnings of Upper Secondary Education

Post-Secondary Education is not Common Outside of the US

5.5 3.8

32.0

3.4

14.1

44.0

7.9

54.3

2.8

0

10

20

30

40

50

60

Braz

il

Chin

a

Indi

a

Japa

n

Mal

aysi

a

Mex

ico

Sout

hKo

rea

Spai

n

US

Percent of 20 – 24 Year Olds Enrolled in Post-Secondary Education

Source: 1997 UNESCO Statistical Yearbook

Growth Coincides Precisely with Limited Supply

18.1

33.3

-1.7

46.4

39.5

16.3

1.3

20.615.7

-10

0

10

20

30

40

50

Braz

il

Chin

a

Indi

a

Japa

n

Mal

aysi

a

Mex

ico

Sout

hKo

rea

Spai

n US

Anticipated Percentage Population Growth 1997 - 2020

Source: 1998 World Almanac

MBA Programs Have Grown Dramatically

0

50,000

100,000

1956

1966

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

3,280

102,171MBA Degrees Granted 1956 to 1998

U.S. Department of Education, National Center for Educational Statistics, Higher Education General Information Survey

People Come From Everywhere To Attend Business School in the US

16%Non-resident Alien

84%U.S. Citizen

16,294

85,877

U.S. Department of Education, National Center for Educational Statistics, Higher Education General Information Survey 1997 - 1998

Approximately 420,000 Students Currently Are Enrolled in US MBA Programs

Full Time Students105,000

Part Time Students315,000

Degrees Conferred102,171

U.S. Department of Education, National Center for Educational Statistics, “The 1995 – 1996 National Postsecondary Student Aid Study” unpublished data.

The Internet Has Been Adopted With Unprecedented Rapidity

7

13

15

22

26

30

34

35

44

46

54

0 10 20 30 40 50 60

Air Travel

Household Electricity

Automobile

Telephone

VCR

Microwave Oven

Television

Radio

Personal Computer

Cellular Phone

The Internet

Number of years to achieve 25 percent U.S. penetration

The Value of The Internet

William Gladstone Michael Faraday

The Internet In The Context Of Other Recent Technologies

The Victorian Internet.

First built: 1774.

Coast-to-coast: 1869.

In 1966, the maximum

number of simultaneous

transatlantic calls was 138. Invented: 1926.

Took 50 yrs.

Before 75% of U.S.

households had

color TV.

Innovation In Education

Facilities

Scalability

JOHANNES GUTENBERG

JOHANNES GUTENBERG

MILMAN PARRY

Why are the Internet and Education when Combined like Money?

Technology-Based Education and Site-Based Learning are Complements

The History of Distance Learning

Learning Platform Version 1.0

Version 1.1

Version 1.2

One way communication

Tracking

A Linear Educational Platform

A Non-Linear Platform

Active tracking

TV is not our Model and Passivity Leads to Failure

Streaming Large Blocks of Text Is Useless

Research Universities Are Unique Institutions

Universities Have Content Knowledge but not Internet or Pedagogical Knowledge

Finding the Right MBA “Fit”