The growth in demand for Australia’s world-class educational and vocational training from countries in the Asia-Pacific reflects the humanitarian miracle unfolding in our region.

With foreign students contributing an unprecedented $16.6 billion last year — our fourth biggest export overall — the prospects for further growth are obvious.

But the challenges are formidable, given competition from our key competitors: the US, Britain, Germany, France and Canada. We have a 6 per cent global share of higher education students and have seen 15 per cent growth during the past year. In the vocational space we have seen 20 per cent growth. The fundamental question is: are we in a position to accommodate continued growth of this scale and at the same time increase global market share?

There is no doubt we have the potential to do it but the need for ongoing innovation in the marketing of our brand and delivery of high-quality content, along with continued investment, are critical.

While China has long been our No 1 market, demand from across the region is quickly growing, in large part driven by a spectacular expansion its middle class.

The changing face of the market can be seen in figures showing that during the past 12 years India has gone from our ninth biggest market to second, Vietnam from 17th to fourth, The Philippines 38th to 14th and so on.

In terms of student numbers, latest figures show that enrolments from India are up 55 per cent, Taiwan 28 per cent, Vietnam 26 per cent, The Philippines 17 per cent, China 15 per cent and Malaysia 13 per cent.

India is our top VET market, having grown 27 per cent in the past year alone, and the demand across the next decade will be phenomenal. As part of his inspiring economic transformation plan, Prime Minister Narendra Modi has set his country the task of skilling and training 500 million Indians by 2022.

Early this year, I led a 450- strong business mission to India that included representation from our higher education, training and skills sectors. The determination within India to address its economic development challenges was palpable. India is looking to back its strengths and become the world’s leading centre for lowcost, labour-intensive manufacturing under its ‘‘Make in India’’ campaign. It is looking to create hundreds of millions of jobs and increase productivity, underpinned by investments in innovation and infrastructure.

In many regards we can expect from India a repeat of what we have seen from China during the past 15 years. The scope for growth in our trading relationship is clear when you consider our two-way trade with India is about $15.5bn, compared with $160bn with China — two countries with one billionplus populations.

We share much in common with India beyond a love of cricket, including democratic institutions and the English language. India — with as many as 350 million English-speaking citizens — is challenging the US as the leading English-speaking country.

It explains the logic in us looking to conclude a bilateral economic trade and investment agreement by the end of this year. Services, including education and training, are a key focus of our negotiations.

The 15 per cent growth in the past year has translated into record commencements of about 100,000. We also are seeing a shift in demand towards masters as opposed to bachelor degrees. This highlights how the market is forever evolving.

Sure, we can look to increase the number of students studying here. Last year we welcomed more than 400,000 from more than 150 markets. But the potential exists to be teaching up to 10 million students within the region within 10 years if we adopt a wide range of different models across higher education, vocational education and training and secondary levels, most requiring some form of presence in the various markets.

Many providers are beginning to expand their physical footprints offshore through the development of campuses and partnerships. In secondary education, for instance, independent Melbourne school Haileybury opened a campus outside Beijing in 2013 to educate Chinese students through to Year 12. This will be a feeder school through to Australian universities.

The model of study in Australia will address only a fraction of the global demand for higher skills.

There are many potential students who cannot travel to Australia but still require skills and training.

The challenge is to engage millions of people in their own country through offshore delivery and by harnessing the power of digital technologies. Australia has wellestablished expertise in distance education, including online, and we can build on that foundation.

We know, for example, that employers and their workers don’t always require a full qualification.

Often what they want is a partial qualification or proven skill that may or may not be accredited but that is still delivered with the high quality for which Australian education is renowned.

Massive open online courses demonstrate the power of online technology that can be applied to vocational skills and training for overseas students.

Blended education models will see most of a course delivered in a student’s home country complemented by a flagship course or semester in Australia. In turn, Australian students can do likewise in a partnership educational institute.

We also need to work hard at adapting our vocational skills and training content to international needs and, to their great credit, providers are always trying new ways to deliver their product.

As a government we are inno-vating, too; testing approaches that may assist the delivery of Australian skills in-market.

Late last year, for example, we launched three products based on training packages in India. These look at ways to train and assess workers and will be trialled by several Australian public and private providers there across the next 12 months.

I have asked Austrade to work with the international education sector this year, including with non-traditional players, to develop a long-term market development strategy out to 2025.

This will unearth new thinking and initiatives to support the potential for growth. It will complement the work of federal Education Minister Christopher Pyne, who is finalising a broader national strategy for the international education sector.

A spectacular opportunity lies before us. The real test is working out ways to make the most of it.

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