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WITH
THE LARGEST HIGHER EDUCATION system in the world and most of the top brand
names, the U.S. attracts 30% of the 1.5 million students who study abroad
each year. But its market share has slipped, from 40% a decade ago. The
downward trend is continuing, according to the New York-based Institute
of International Education.
In
absolute terms the number of foreign students studying in the U.S. rose
by 11% during the period, but competitors such as Australia and the United
Kingdom gained more. "We have gotten fat and lazy," says Philip Altbach,
professor of higher education at Boston College.
In
the process, the U.S. may miss out on connections to the next generation
of international billionaires. Japan's Masayoshi Son, Venezuela's Gustavo
Cisneros and Hong Kong's Patrick Wang are among those on FORBES' latest
billionaires list who have studied here.
Even
lesser-heeled foreign students can pay dividends after they return home,
either by working for the host country's multinationals or starting businesses
with ties to that nation. Half those studying in the U.S. are pursuing
degrees in business, engineering or math-computer sciences.
And
while they're here, they're usually paying full tuition. In fact, viewed
in economic terms, "foreign students are yearlong tourists, some of whom
bring their families with them," says Iain McNicoll, an economics professor
at Glasgow's University of Strathclyde. He has a point. Last year foreign
students contributed $11 billion to the U.S. economy, about a tenth of
the export revenues the tourist industry generated.
Australia,
with less than a tenth of America's population, last year earned $2 billion
on foreign education, or a third of what the country made on tourism.
That success stems from smart marketing. Australians are the number one
recruiters of students in Malaysia, Singapore and Indonesia. Australian
universities co-own IDP Education Australia, a recruiting firm with a
staff of 450. IDP organizes trade shows promoting Australian universities--all
held in five-star hotels to attract the upper-crust families who can afford
to send their children to study abroad--and guides potential students
through visa and university applications.
It
works. Says Robin J. Lewis, an associate dean of Columbia University's
School of International & Public Affairs, who last year went on a recruiting
trip to Vietnam: "When I offered a slot at SIPA to a Vietnamese student,
I often heard: 'Thanks, but no thanks--I already got a better offer from
Australia"
The
British are intensifying their recruiting efforts, too. Last year Prime
Minister Tony Blair announced an $8 million campaign--which includes simplifying
the visa process and jazzing up the "stodgy" image of British schools--to
recruit an additional 75,000 international students from outside the European
Union within five years. The British Council, a cultural-export agency,
already has marketing directors in 110 countries.
The
U.S. doesn't have an equivalent of IDP or the British Council. Some of
the promotion of American schools abroad falls under the purview of the
State Department's Bureau of Educational & Cultural Affairs, whose funding
has been steadily cut over the past decade. "The federal government is
not involved and the states don't care. There is nobody minding the store,"
says Altbach.
Left
to their own devices, too few U.S. schools market themselves internationally,
says Allan E. Goodman, president of the Institute of International Education,
which was set up in 1919 to foster educational exchange, but does not
do general recruiting. As a result, nearly half of foreign students in
the U.S. are concentrated in just 100 out of 2,500 post-secondary institutions,
mostly brand-name schools.
Even
a top-tier program might undersell itself. Says Georg Szalai, a 26-year-old
Austrian, "I knew I wanted to study journalism in the U.S., but I did
not know what the good schools were. It took me a month of going through
American magazines and books before I found out about Columbia University's
journalism program."
When
foreign students stay to work after they graduate, as they are permitted
to do, they can help allay labor shortages, such as the 850,000-employee
gap in U.S. information technology expected by the year 2002. The number
of American citizens graduating with electrical engineering degrees, for
instance, fell by half over the past ten years. "Foreign students would
be a short-term solution," says Daniel Larson, a director of government
and media relations at Texas Instruments, which has 800 unfilled jobs
for electrical engineers.
Countries
that traditionally never allowed foreign students to stay and work--like
the United Kingdom or Germany--are facing their own labor shortages in
information technology and relaxing their immigration laws. But Goodman,
the promoter of American colleges, says economic improvements in many
emerging markets lead more foreign students to return home these days.
That's
okay, too. While getting an M.B.A. at Stanford, Argentinean Hernan Kazah
envisioned a Latin American version of Ebay. Kazah approached his finance
professor for introductions to U.S. moneymen. Ultimately, Chase Capital
Partners, along with Hicks, Muse, Tate & Furst and Flatiron Partners,
invested a total of $7.6 million in the first round of financing for the
company, MercadoLibre.
Says
Moises Eilemberg of Chase Capital Partners: "Thanks to having Hernan study
here, we had access to the Latin American Internet market before everybody
else could get a crack at it."
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