Published in the National Business Review of 8 August 2008

The economic impact of export education has increased despite a fall in the number of students studying in New Zealand, an Infometrics report says.

The report, which is being released today at the Education New Zealand's annual conference says "over 2007/08 the export education industry generated around $2.4 billion of foreign exchange, of which $70 million came from offshore provision."

Education New Zealand Chief Executive Robert Stevens says the research "demonstrated unequivocally that foreign students and other education service exports are a reliable and welcome source of earnings in today's hyper-competitive global marketplace."

In 1999 the contribution of export education to gross domestic product was estimated at $545m. By 2001 this had more than doubled to $1.35 billion.

In 2004 Infometrics estimated the industry's value added contribution at approximately $2.2 billion.

The number of foreign fee-paying students has been falling since 2003.

However provisional results from the Infometrics study "indicate that the industry's direct contribution to New Zealand's gross domestic product is estimated at $1.1 billion, rising to approximately $2.1 billion after allowing for flow-on effects to other industries and leakages offshore. "

The current report is based (for the first time) on a dedicated survey of expenditure by foreign fee paying students and in another first includes the value of educational services provided by New Zealand companies and educational institutions off shore.

Infometrics says the off shore revenue "comes from the sale of professional services such as teaching, training, curriculum development, quality assurance, consulting and advisory services."

China is the main source of these earnings.

There are 91 300 foreign fee paying students currently studying in New Zealand, with 24 800 (27%) coming from China and 17 900 (19.6%) from Korea. The China figure is about half the peak recorded in 2003/04.

Universities are the largest sector and are the largest source of foreign exchange earnings - about 32% of the total.

Numerically more students attended English language schools but many of those 33,700 students are part-time.

Mr Stevens said international education had been a remarkable business success.

"Twenty years ago, it was a very modest industry. In the last decade, foreign earnings have gone up over 400%.

"Markets have ebbed and flowed, but the industry has emerged from an unhealthy dependence on China and developed into a robust and diverse supplier of top quality education services both at home and abroad, with major scope for further expansion into a willing and receptive global market.

"The future looks bright."